Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Plummets as Australian Unemployment Rate Surprises
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate recorded market movement of -1.39% during Thursday’s trading after the Australian Unemployment Rate took a surprise dive.
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Australian Employment Change figures showed the Australian economy produced 37.4K jobs in December—an event that pushed down the Unemployment Rate to 6.1%. Furthermore, the November figure was also positively revised from 6.3% to 6.2%.
Many economists have speculated that the Reserve Bank of Australia (RBA) may need to cut interest rates to allow growth in the Australian economy. In addition, some experts have suggested that Australia could be on the verge of recession.
ANZ economists have forecast that the RBA is likely to cut rates twice in 2015, despite the central bank stating they haven’t considered a cut as of yet.
ANZ chief economist Warren Hogan stated: ‘Weaker growth and lower inflation in 2015 will provide the RBA with a reason and the scope to take the cash rate down 50bp to 2.00% over the first half of the year.’
However, the employment figures have offered a bit of support to those optimistic economists that feel rate cuts aren’t necessary.
Economist Shane Lee doesn’t feel there’s any need for the RBA to cut rates as the participation rate rose enough to suggest that citizens’ confidence in finding a job has increased.
Lee commented: ‘There’s enough evidence out there that the numbers are broadly believable. The unemployment rate is probably the best and most reliable piece of information that comes from this data, and it fell.’
Meanwhile, the Pound is likely to become extremely sensitive to political issues in coming months. As we approach the general election in May, political parties are expecting to step-up their tactics to win votes.
However, citizens have seen Prime Minister David Cameron retreat from the prospect of a televised debate this week, not exactly a reassuring move by the PM.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate could feel the impact of several data releases in the week ahead. Tuesday will see the publication of Westpac’s January Consumer Confidence figures, which resided at 91.1 in December.
However, Wednesday will be a big day for Pound Sterling trading when UK Employment Change and Unemployment Rate ecostats emerge. The Unemployment Rate resided at 6.0% in the three months through November.
In addition, Bank of England (BoE) Meeting Minutes will also be released and could see the Pound swing dramatically if more than two Monetary Policy Committee (MPC) policymakers voted in favour of a rate hike.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is presently trending in the region of 1.8466. The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate resides at 0.5416.