GBP/AUD Exchange Rate Forecast: UK News to Drive Movement
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The news that Australia’s unemployment rate had jumped to a 12-year high caused widespread ‘Aussie’ losses on Thursday, but the South Pacific currency did manage to recover ground against a struggling Pound.
Sterling came under pressure yesterday after the Bank of England delivered a bland policy statement and investors dwelt on the possible implications of Scottish independence.
The Australian Dollar also received some support from surprisingly strong Chinese trade data.
China’s trade surplus was shown to have widened to a record level last month as exports surged by 14.5% on a year-on-year basis- over double the increase forecast.
Imports fell by 1.6%, resulting in a surplus of 47.3 billion Dollars.
The positive impact of this report was slightly negated by Australia’s negatively revised inflation report. The Reserve Bank of Australia slashed its inflation forecast by 0.75 percentage points.
The Pound Sterling to Australian Dollar exchange rate fell to a low of 1.8126.
However, the Australian Dollar was unable to advance on the bullish US Dollar and the AUD/USD pairing slid to as low as 92.44 US cents, prompting this response from senior economist Janu Chan; ‘The RBA’s concerns about the high Dollar are still there. But it’s about time markets reassessed potential geopolitical risk and that’s what traders were looking at more.’
A conflict-driven risk-off environment has also dented the appeal of the Australian Dollar.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
Next week volatility in the Pound Sterling to Australian Dollar exchange rate could be caused by several comparatively influential economic reports for Australia.
Investors will be focusing on the ANZ Roy Morgan Weekly Consumer Confidence Index, the NAB Business Confidence report, Australia’s House Price Index, Australia’s Westpac Consumer Confidence Index, the nation’s Wage Cost Index and Average Weekly Wages.
However, while these reports are noteworthy, movement in the GBP/AUD exchange rate is more likely to be triggered by UK news – in particular the nation’s employment figures.
Another strong gain in British employment could boost the Pound but investors will really be waiting to see whether average weekly wage growth has stepped up a gear. Signs that wages are lagging even further behind the rate of inflation would be detrimental to the prospect of a Bank of England interest rate increase and could drag the Pound lower.
As China is Australia’s main trading partner, the nation’s Retail Sales and Industrial Production figures will also be influential.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.8158.