The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.8114 on Tuesday having experienced only minimal movement in response to several Australian economic reports.
Overnight the level of Business Confidence in Australia was shown to have rallied to its strongest level for almost a year in July. The National Australia Bank report showed a revival from 8 to 11, indicating that people are getting over May’s National Budget and are starting to be more optimistic about Australia’s economic outlook.
However, the report wasn’t all positive as NAB’s chief economist cautioned that sentiment outside of Australia’s retail and construction sectors was still flagging.
Alan Oster asserted; ‘The composition of confidence may provide some cause for reservation about this optimism, at least in the medium term. Soft wages growth, a rising unemployment rate and a decline in June quarter retail sales suggest that this confidence may be tested.’
The Pound Sterling to Australian Dollar exchange rate fell to a low of 1.8085
The NAB Business Conditions index also climbed from 2 to 8 in July.
Separate Australian data revealed a stronger-than-anticipated increase in the nation’s House Price Index.
The housing measure posted a gain of 1.8% in the second quarter on a quarter-on-quarter basis. A more modest 1.0% increase had been anticipated.
On the year, the house price index jumped by 10.1% in the second quarter.
The GBP to AUD exchange rate was little affected by the British Retail Consortium’s Like-for-Like sales report.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The Pound to Australian Dollar exchange rate is likely to experience extensive movement tomorrow as investors digest the Bank of England’s (BoE) inflation report and the UK’s employment figures for the three months to June.
Australia’s Wage Cost Index and Westpac Consumer Confidence measure will also be of interest, as will China’s Industrial Production and Retail Sales figures.
If the UK’s reports surprise to the upside or increase the odds of a Bank of England interest rate increase taking place this year, we forecast that the Pound could climb on the Australian Dollar.
The Pound to Australian Dollar exchange rate achieved a high of 1.8142.
GBP/AUD Exchange Rate Softens Following Poor UK Labour Market Data
The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.8012.
Today’s heavy UK domestic data docket has not boded well for Sterling. Whilst the ILO Unemployment Rate’s actual figure of 6.4% was true to the forecast, Average Weekly Earnings posted an unfortunate drop from the forecast figure of -0.1% to -0.2%. This has weakened the Pound considerably ahead of today’s Bank of England (BoE) Inflation Report. Given the undesirable miscorrelation between average weekly earnings and unemployment, it is increasingly likely that the BoE will maintain its current interest rate for the rest of 2014.
There has been little data to affect the Australian Dollar; however it is likely to drop against many currencies as traders trend towards risk aversion in light of the many geopolitical issues across the globe.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar, 0.9256,
Australian Dollar,,Euro, 0.6941,
Australian Dollar,,Pound, 0.5521,
Australian Dollar,,New Zealand Dollar, 1.0986,
US Dollar,,Australian Dollar, 1.0795,
Euro,,Australian Dollar, 1.4404,
Pound Sterling,,Australian Dollar, 1.8107,
New Zealand Dollar,,Australian Dollar, 0.9089,
[/table]
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