AUD/GBP Exchange Rate Stronger on Fed Minutes
The Australian Dollar to Pound (AUD/GBP) exchange rate has been softening on Wednesday and is presently trading at 0.5466. The ‘Aussie’ has felt downward pressure after the Australian Bureau of Statistics (ABS) admitted the latest monthly jobs report was untrustworthy. This session has seen the ‘Aussie’ reach highs of 0.5484 and lows of 0.5448 versus Sterling.
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Analysts from banking institutions all over Australia, including the Reserve Bank of Australia (RBA) have been doubting the August figure which showed job creation excelled at 121,000—one of the biggest jumps in the past 40 years. However, the seasonally adjusted figure showed that only 32,100 secured work.
Industry expert Annette Beacher commented: ‘No one believed the outsized August report. But there is still a clear picture of an improving labour market.’ The current fluctuations in the job sector are causing problems for the RBA which is trying to gauge headwinds to the economic recovery.
RBA Governor Glenn Stevens announced on Tuesday: ‘Labour market data have been unusually volatile of late. The bank’s assessment remains that although some forward indicators of employment have been firming this year, the labour market has a degree of spare capacity and it will probably be some time yet before unemployment declines consistently.’
However, the Bureau has stated that it will reinvent its current method of seasonally adjusting data after the last three months have seen massive variations. Seasonal adjustment is used by statisticians to eliminate seasonal work differentials and the upturn in hiring/firing it creates.
Now the ABS have admitted the figures are unreliable, economists are focussing on Thursday’s Employment Change and Unemployment Rate numbers to see if they are more believable.
Strategist Sean Callow commented: ‘Now that we’ve got a more plausible starting point, it makes it more interesting in a way really because you don’t have to be distracted by this extraordinary August number. It’s still going to be messy and the unemployment rate, who knows, so there’s still a lot of uncertainty over the release tomorrow. The employment report is probably the most reliable source of volatility for the ‘Aussie’’.
Meanwhile, the Pound found little support from the release of a favourable Halifax House Price report, which saw a 0.6% rise in September. Economists had only predicted a 0.2% increase in property values after August registered stagnation.
However, Halifax commented that it believes prices are due to moderate in the next few months, inspiring little to no support for Sterling. Halifax economist Martin Ellis commented: ‘A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand become increasingly better balanced.’
Australian Dollar to Pound (AUD/GBP) Exchange Rate Forecast
Thursday will be an interesting day for the ‘Aussie’ to Sterling exchange rate as influential data is released. Australian figures will dominate the early session with Consumer Inflation, Employment Change, Unemployment Rate and Full Time Employment Change statistics.
Later on Thursday the Bank of England (BoE) will announce its latest Rate Decision which is likely to see the central bank maintain its current 0.50% bank rate. However, any comments made by BoE officials are likely to impact the Sterling exchange rate.
BoE Policymaker’s are due to speak in Washington on Friday, which may also cause movement for the Pound. Any hawkish comments could encourage a Pound rally in the GBP to AUD currency pair.
The Australian Dollar advanced against the Pound and other major peers after it found support from the release of more dovish than expected Federal Reserve Minutes.
The Minutes published on Wednesday showed that Fed policy makers are concerned over the strength of the US Dollar and the overall state of the global economy.
Because of the dovish minutes, the Aussie advanced despite the release of weak jobs data.
According to the Australian Bureau of Statistics, the nation’s unemployment rate held at 6.1% last month but the number of people out of work increased more than forecast.