The Pound has made a slight advance against the Australian Dollar recently, but may struggle in the near-term on UK government news.
Australian Dollar movement could be better by comparison in the future, provided that higher interest rates seem possible.
Pound Could Slump if Companies Leave Government in the Cold
Looking to near-term sources of Pound movement, one possible factor will whether a Brexit-linked letter is published.
Among the recent leaks of government documents, one has been a letter send to UK business leaders. The open letter requests the support of businesses across the UK, asking them to publically back the government’s strategy for implementing Brexit.
However, as the plan has been spoiled by this latest leak, it remains to be seen whether the document will actually be published at all.
Another element that plays into this is that a number of UK businesses and organisations have recently held strong criticism for another leaked document about EU workers.
The leaked notes revealed plans to penalise employers for hiring EU workers over UK citizens and additionally suggesting limiting how long EU workers could remain in the UK for.
The now extremely-open letter had been planned to hit the papers on September 10th. If it fails to make an appearance as some suspect, this may be considered another strike against the government and lead to a GBP AUD slide.
Lower AU Unemployment may Trigger AUD-Boosting Interest Rate Hike
For possible sources of Australian Dollar movement in the future, it is worth looking to the jobs data out on September 14th.
As well as general improvements in the Australian economy, higher employment is one of the factors that could lead to the Reserve Bank of Australia (RBA) raising interest rates.
The RBA has left interest rates untouched since August 2016, but may finally be on track to consider raising rates once again.
As it stands, forecasts are for no change in unemployment in August, but continued growth in overall employment. Crucially, full-time employment is tipped to rise, which is superior to an increase in part-time employment.
While higher employment on its own might not be enough to push the RBA into considering higher interest rates, coupled with higher wages in the future this could make the central bank pause for thought.
Widespread improvements in the jobs market may be enough to bring an AUD-boosting interest rate hike, which would be the first such increase since November 2010.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound to Australian Dollar (GBP AUD) exchange rate was trading at 1.6300 and the Australian Dollar to Pound (AUD GBP) exchange rate was trading at 0.6132.
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