Australian Employment Change Smashes Forecast to Bolster Australian Dollar (AUD) Demand Today
Rather outdoing yesterday’s UK data, the Australian Unemployment Rate showed an unexpected and dramatic fall to 5.9%. As the corresponding Employment Change also rocketed past forecast to clock in at an increase of 58,600 the ‘Aussie’ (AUD) has been on bullish form on Thursday. Consequently the GBP/AUD exchange rate is in a decided downtrend around 2.1276.
Earlier…
Despite sentiment towards the ‘Aussie’ (AUD) remaining relatively strong on Wednesday morning the GBP/AUD exchange rate has been on an uptrend after the UK’s Unemployment Rate was revealed to have fallen to a fresh seven-year low.
Australian Dollar (AUD) Shored up as Consumer Confidence Index Bettered Forecasts
Although the increasing odds of a December interest rate rise from the Fed have been weighing on the outlook of the Australian Dollar (AUD) in recent days the antipodean currency was buoyed this week as overvaluation concerns drove the US Dollar (USD) back down. The NAB Business Confidence Index showed a decrease from 5 to 2 but was mostly overshadowed by a stronger-than-expected domestic Home Loans figure. New loans for house purchase unexpectedly rose in September, defying forecast to print at 2.0% rather than 0.0%, to suggest that consumer confidence was strengthening somewhat. This was supported overnight by the Westpac Consumer Confidence Index for November, which strengthened from 97.8 to 101.7.
UK Unemployment Rate Falls to Seven-Year Low Today, Pound Sterling (GBP) Rallied on Hawkish BoE Comments
While the Pound (GBP) has been relatively bearish on the back of the Bank of England’s (BoE) latest Inflation Report and more dovish tone, traders had been hopeful of a rally with today’s raft of fresh UK employment data. The domestic Unemployment Rate was rather more optimistic than anticipated, clocking in at a new seven-year low of 5.3%, but other figures were decidedly less positive. Average Weekly Earnings failed to accelerate in the three months to September, holding steady at growth of 3.0%, while Jobless Claims Change showed that a far higher gain in the number of new claims made for unemployment benefit than had been forecast.
As this mixed data failed to offer particular support to speculation that the BoE could be prompted to begin tightening monetary policy in the nearer-term Sterling began to retreat somewhat. However, hawkish remarks from Governor Mark Carney indicating that global headwinds might not be such an impairment to the domestic economy soon helped to bolster the Pound.
GBP/AUD Exchange Rate Forecast: Downtrend Likely as Australian Employment Change Predicted to Strengthen
Tomorrow’s Australian Employment Change and Unemployment Rate are likely to trigger further movement for the GBP/AUD exchange rate, particularly if the number of employed individuals within the domestic economy is shown to be quite as bullish as expected. While commodity price concerns could well continue to weigh on the ‘Aussie’, a decidedly strong showing in employment would be enough to prompt an antipodean currency rally.
Domestic data will be rather sparser from the UK ahead of the weekend, although Friday’s Construction Output figures could provoke some volatility for the currency. If output is revealed to have improved in September this may boost the GBP/AUD pairing further.
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 2.1509, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing retreated in the range of 0.4647.
Comments are closed.