The Pound Australian Dollar (GBP AUD) exchange rate rallied by nearly a cent this morning as the British Consumer Price Index reported a better than expected jump in UK inflation.
Pound Australian Dollar (GBP AUD) Climbs on UK CPI Report
The Pound (GBP) was bolstered by the rise in inflation as it surged from 0.9% to 1.2% in November, beating expectations it would rise to 1.1% and reaching its highest levels since October 2014.
The surge also caused some investors to speculate that the growth may cause the Bank of England (BoE) to reassess its monetary easing and soften its dovish approach to raising interest rates.
However there are concerns that the accelerated inflation rate will take its toll on public spending as consumer prices are expected to see significant rises in 2017.
Australian Dollar (AUD) Weakened as House Prices Unexpectedly Slip
The Australian Dollar (AUD) fell this morning as it was pressured by an unexpected drop in Australian House Prices – which only rose by 3.5% in the third quarter, sliding from a 4.1% increase in the second quarter and falling short of an expected rise to 4.6%.
This was the housing market’s slowest growth since the first quarter in 2013 and was significantly below the 10.7% gains seen this time last year. The decline was largely attributed to Australia’s mining capitals, Perth and Darwin, where house prices fell 1.6% and 1.2% respectively.
GBP AUD Forecast: Employment Data Ahead
The Pound to Australian Dollar exchange rate may see some notable movement later in the week as both Britain and Australia are set to release their latest unemployment figures.
The UK Unemployment Rate is expected to remain stable at 4.8% in October after it dropped to its lowest levels in eleven years back in September. However a surprise rise in employment could cause the Pound to appreciate further against the Australian Dollar.
Meanwhile, Australia’s own unemployment report is also expected to show that employment remained flat in November as it holds at its lowest rate since September 2013. While a jump in the Employment Change figure from 9.8k to 17.5K is expected, investors do not believe it will not translate into any notable drop in the unemployment rate.
Current Interbank Exchange Rates
At the time of writing the GBP/AUD exchange rate was trending around 1.69 and the AUD/GBP exchange rate was trending around 0.58.
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