Pound to Australian Dollar Exchange Rate Gains on Broad ‘Aussie’ Weakness
While demand was mixed last week, the Australian Dollar (AUD) has become even less appealing this week and is being sold even versus a relatively unappealing Pound (GBP). The Pound to Australian Dollar (GBP/AUD) exchange rate has been climbing solidly.
GBP/EUR continued to climb this morning, trending near a fortnight high and best June level of 1.8331 at the time of writing, as the Australian Dollar continued to tumble.
It has gained over a cent already, after trending closely to the key level of 1.8200 for most of last week.
Despite a lack of solid demand for the Pound, it has been able to comfortably sustain gains against a highly unappealing Australian Dollar.
The ‘Aussie’ could see even bigger movement towards the end of the week as well, if tomorrow’s Australian job market report surprises investors.
Pound (GBP) Exchange Rates Benefit from Higher Wages Figures
The Pound has been nursing wounds since the end of May, when it suffered significant losses on political and Brexit fears.
As a result, even the knock the British currency took from a concerning UK growth report on Monday was limited. Investors were hesitant to sell the British currency too much lower than it had already been sold.
Tuesday’s UK job market report gave the Pound a little fresh support as well, which helped the British currency to rebound from its worst levels a little more strongly.
Concerns remained on signs that Britain’s job market was showing signs of slowdown, but markets were still cheered by news that more new jobs were created than expected, and that wage growth had been stronger than forecast.
This made it easier for the Pound to sustain some gains against a broadly weaker Australian Dollar.
Australian Dollar (AUD) Exchange Rates Slump on Trade Jitters and Poor Australian Data
Pressure against the Australian Dollar continues to mount this week, following last week’s rise in global trade uncertainty and poor Australian growth data.
While the Australian Dollar was briefly supported by Federal Reserve interest rate cut bets last week, Fed rate cuts have now been largely priced in and instead investors are refocusing on US-China trade tensions.
The trade war between the US and China is expected to persist, and investors are anxious about a potential meeting between US President Donald Trump and China President Xi Jinping at a G20 summit at the end of the month.
As China is Australia’s biggest trade partner, the Australian Dollar has been regularly influenced by US-China trade war fears.
On top of trade jitters keeping AUD unappealing, today’s Australian consumer confidence data from Westpac showed a contraction of -0.6% which put further pressure on AUD.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Investors Anticipate Australian Job Report
The Pound to Australian Dollar exchange rate could be in for even further gains towards the end of the week if Australia’s upcoming major data disappoints investors.
Australian job market stats from May will be published during Thursday’s Asian session.
As Australia’s job market is a major influence for the Reserve Bank of Australia’s (RBA) monetary policy, the data could have a big impact on RBA interest rate cut bets and AUD strength if it surprises markets.
Employment is expected to have slowed in May, but the key unemployment rate is forecast to have improved to 5.1%.
Stronger than expected Australian job stats could even cause the Pound to Australian Dollar (GBP/AUD) exchange rate outlook to weaken again.