The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate recorded losses early in Friday’s session after the Reserve Bank of Australia (RBA) Governor Glenn Stevens spoke.
The central banker suggested that the ‘Aussie’ is likely to fall further against other majors and that any changes in the official cash rate needs to be handled with sensitivity.
Stevens stated: ‘The economy is not in recession, it’s not contracting, we’re not having hundreds of thousands of jobs lost over a year. So I think we need to be careful with the language, just to convey to people what’s going on.’
On Thursday.. The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate made significant advances during Thursday’s trading with a market movement of +0.60% nearing the close of the session as Australian Unemployment Rate figures weighed on the ‘Aussie’ commodity currency.
However, some were less pessimistic, as ANZ economist Savita Singh stated: ‘Despite the unemployment rate printing a touch higher in rounded terms, November’s report was overall slightly better than the market expected, and suggested labour market conditions improved modestly in November.’
Earlier… The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has been trading within a narrow range in the early hours of Thursday’s European session after Australian Employment Change and Unemployment Rate figures came to light.
The Unemployment Rate crept higher in November from 6.2% to 6.3%–a factor that offered the Australian Dollar little support. However, Employment Change figures showed 42.7K jobs were created–the most in two years, opposed to the 15.0K forecast.
HSBC commented: ‘Australia’s labour market remains loose, but is showing signs of stabilising. However, trend employment growth remains subdued – the economy has only added an average of 13K jobs a month over the past six months. That is not enough to keep up with population growth.’
JP Morgan Forecasts Iron Ore Losses – ‘Aussie’ (AUD) Exchange Rate Resilient
In Wednesday’s session… The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate remained in a narrow range at the close of Wednesday’s trading as the Australian Dollar remained resilient in the face of weak Australian and Chinese figures.
However, the Australian economy could have a bumpy road ahead with the possibility of further iron ore depreciation in the near future.
JP Morgan have forecast more cuts to the commodity price after global supply doesn’t appear to be slowing.
JP Morgan stated: ‘The only way the oversupply can be averted is if the low-cost producers cut back on their growth targets.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate maintained gains made in the early part of the European session ahead of the Bank of England (BoE) Warsh report on Thursday.
The Pound Sterling exchange rate could fluctuate on the findings in Kevin Warsh’s report who was a former Governor for the US Federal Reserve. The document will report Warsh’s findings on the benefits of greater transparency within the central bank, a prospect that could see the British currency fluctuate significantly.
The Bank of England removes any evidence of the Monetary Policy Committee (MPC) meetings, instead of releasing them five years later like the Federal Reserve currently do.
Former MPC member David Blanchflower commented: ‘Unless there’s a very good reason not to, the default must always be to provide transcripts with a reasonable amount of time. These are elected officials with a lot of power who have to expose themselves to the public.’
Trade Balance Figures Offer Hope to Pound Sterling (GBP) Exchange Rate
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has been trending lower in the early part of Wednesday’s European session after disappointing UK data on Tuesday. However, Pound Sterling strength may materialise in the hours ahead as UK Trade Balance figures offered some support.
The UK trade deficit shrank from -£10.506 billion to -£9.620 billion in October, not quite as low as economists’ -£9500 forecast, but still an improvement. Furthermore, the figure reached a seven-month low with the help of recent falls in oil prices.
The Office for National Statistics (ONS) stated: ‘Between September and October 2014, exports of goods rose by £0.2bn to £24.3bn, mainly reflecting a 0.1bn increase in exports of erratic items; specifically silver. Imports of goods fell by £0.7bn to £34bn over the same period, reflecting a £0.9bn decrease in fuel imports; specifically oil from countries outside the EU.’
Australian Dollar (AUD) Exchange Rate Claws Back Ground
Meanwhile, the Australian Dollar has been busy reclaiming losses posted earlier in the week as a result of Reserve Bank of Australia (RBA) interest rate cut speculation. Some of Australia’s largest banks, including Westpac and the National Australian Bank (NAB) have replaced forecasts for rate hikes in 2015 with rate cuts instead.
Predictions that an RBA rate cut could take place as soon as February proliferated after a recent surprise fall in Australian GDP data The Australian Dollar’s downtrend was aided by weaker iron ore prices. However, the ‘Aussie’ has remained comparatively high throughout the year despite an almost 50% depreciation in its largest commodity.
Poor Figures Cause Tumble in Confidence, Australian Dollar (AUD) Suffers Losses
Any weak figures can have an economic domino effect and Wednesday’s Australasian session saw this reflected in Australian Consumer Confidence figures. The Westpac index fell from 96.6 to 91.1—a three-year low that the bank deemed ‘disturbing.’
Westpac chief economist Bill Evans commented: ‘Respondents are clearly concerned about the outlook for the economy and job security. In addition there is ongoing disillusionment about the May budget, six months after it was announced.’
Moreover, Australian Business Confidence also dropped to a 16-month low falling to 1 from 5 in November.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate can expect an interesting day on Thursday when both Australian Employment Change and Unemployment Rate figures are published. At present, forecasts expect an increase in joblessness, with the unemployment rate rising from 6.2% to 6.3%. If the Unemployment Rate does climb, the Australian Dollar exchange rate may suffer losses.
Hawkish Bank of England (BoE) policymaker Ian McCafferty will speak in Liverpool during Thursday’s session, which could allow some Pound Sterling exchange rate movement.
Friday will be relatively quiet for both the UK and Australia and therefore market movement may be determined by any global developments.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is presently trending in the region of 1.8841. The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is residing at 0.5309.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Australian Dollar , 1.8887,
US Dollar,, Australian Dollar, 1.2045,
Canadian Dollar,, Australian Dollar, 1.0509,
New Zealand Dollar,, Australian Dollar , 0.9399,
Euro,, Australian Dollar , 1.4989,
[/table]
