Upbeat Australian Consumers Prompt GBP/AUD to Slide
The Pound Australian Dollar (GBP/AUD) exchange rate is sliding this morning as Australia’s latest confidence figures impresses markets.
At the time of writing the GBP/AUD exchange rate is down by around 0.20%.
Australian Dollar (AUD) Finds Fleeting Gains Following Confidence Figures
The Australian Dollar initially rose against the Pound at the start of the Asian trading session today as markets welcomed the latest Australian Consumer Confidence figures.
The confidence figures suggests that households in Australia are increasingly optimistic in their economic outlook, with the sentiment index rising from 103.3 to 105.1 in January.
This beat market expectations that confidence would dip slightly and also prompted the index to strike its best levels since the end of 2013.
The latest lift was largely attributed to Australia’s improving economic situation, particularly in regards to employment.
Matthew Hassan, Senior Economist at Westpac said;
‘Sentiment has continued to recover from the weakness seen in the September quarter last year, bolstered by a less threatening outlook for interest rates and improving confidence around the economy and jobs.’
However the Australian Dollar saw some weakness later in the session as concerns over falling commodity prices weighed on the currency.
Brexit Developments to Remain Key Barometer for Sterling (GBP)
As we edge closer to the start of the second stage of Brexit talks, investors are increasingly looking at what factors are likely to come into play and how they will impact both the talks and the Pound.
The UK’s future trade relationship with the EU is of course one of the most pressing issues that faces negotiations.
Luckily the UK has a few friends in the EU which would like to see the UK as closely aligned in trade as possible, with both Spain and the Netherlands supporting a deal that would see Britain remain part of the single market.
Whether this will have any bearing on talks however remains to be seen.
GBP/AUD Forecast: Australian Employment Growth to Slow?
Looking ahead the GBP/AUD exchange rate may strike higher later tonight as Australia publishes its latest employment figures.
While the jobless rate is expected to have held steady at 5.4% last month, economists forecast that employment growth will have slowed from 61,000 to just 9,000, likely denting the appeal of the ‘Aussie’.
Meanwhile the Pound may stumble again at the end of this week’s session with the release of the UK’s latest retail sales figures, with sales expected to have slumped from 1.1% to -0.6% in December.