Disappointing Australian Employment Change Figure Weighs on ‘Aussie’ (AUD) as 2015 Fed Bets Retreat
Although the ‘Aussie’ (AUD) was softened overnight by the release of the domestic September Employment Change figure, which unexpectedly fell by -5,100, the increasingly low chances of a 2015 interest rate rise from the Fed helped to bolster the antipodean currency. As such, the GBP/AUD exchange rate was slumped around 2.1063.
Earlier…
Lowered UK unemployment has boosted the Pound (GBP) today as talk of near-term Bank of England (BoE) interest rate rise returns.
Negative UK Inflation Weighed on Sterling (GBP), AUD Retreated on Weak Chinese Imports
The bullish run of the ‘Aussie’ (AUD) was brought to an end on Tuesday in spite of the Australian NAB Business Conditions Index rising in September, as evidence emerged of further economic weakness in China. Of particular concern to traders of the antipodean currency was the sharper than forecast decline in domestic Imports, which slumped by -20.4% in an eleventh straight month of decline. Suggesting that demand is falling in the world’s second largest economy for Australian base metals this saw commodity prices enter a decided downtrend alongside the ‘Aussie’.
The outlook was not so bright for Sterling (GBP), however, as the UK Consumer Price Index printed below expectations to demonstrate negative inflation. While the core figure was somewhat less dovish than the -0.1% baseline and held steady at 1.0% rather than posting a modest rise as forecast, this nevertheless saw the Pound slump dramatically across the board. Economists were quick to dial back odds of an imminent Bank of England (BoE) interest rate rise, some now pencilling the first move in for 2017. As a result the GBP/AUD exchange rate dipped to 2.0839, although the soft ‘Aussie’ allowed the pairing to rebound throughout the rest of the day.
Pound (GBP) Bolstered as UK Unemployment Rate Unexpectedly Falls Today, GBP/AUD Climbs
Although the Westpac Consumer Confidence Index for October rose overnight, from 93.9 to 97.8, this was eclipsed by another disappointing Chinese data release. The domestic Consumer Price Index slipped beyond forecast to clock in at 1.6%, the lowest inflationary reading from the nation since 2009. Worrying traders further this saw the general risk aversion of the market continue today, with sell offs in commodities extending.
It has been a stronger day for the Pound (GBP), with the release of a raft of UK employment data. While Jobless Claims in September defied expectations for a fall and rose by 4,600, this was outweighed by an unanticipated drop in the ILO Unemployment Rate, which dropped to 5.4% in the three months to August. Encouraging faith in the continued economic recovery of the UK and heightening expectations that the BoE could be prompted to begin raising rates sooner in the face of strong Weekly Earnings figures, this saw the GBP/AUD exchange rate boosted to a daily high of 2.1204.
GBP/AUD Exchange Rate Forecast: ‘Aussie’ Could Decline on Reserve Bank of Australia (RBA) Rate Cut Speculation
With no further UK data due for release this week the primary cause of movement for the GBP/AUD pairing will be the upcoming Australian employment figures. The domestic Unemployment Rate is expected to remain static at 6.2%, while Employment Change is forecast to have dropped to 7,100 in September. A stronger performance could see the ‘Aussie’ begin to regain strength, although the antipodean currency could also slide on the back of speculation that the Reserve Bank of Australia (RBA) may soon be prompted to cut interest rates.
Current GBP, AUD Exchange Rates
At time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending positively in the region of 2.1202, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing was slumped in the range of 0.4715.
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