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Pound to Australian Dollar (GBP/AUD) Rangebound After Better-Than-Expected Job Market Report

Australian Dollar Currency Forecast

A stronger-than-expected Australian job market report has kept the Australian Dollar on its strong streak, and the British Pound to Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range as a result.

At the time of writing, GBP/AUD is trending near the level of 1.782. Which is still fairly close to last Friday’s low of 1.7438 – the worst level for the pair in over two years, since November 2018.

Pound (GBP) Edges Lower Amid ‘Aussie’ Rebound

The Pound has seen a rebound in demand this week, amid new hopes that the UK and EU are closing in on a Brexit trade deal.

Investors have been buying Sterling on hopes that a deal is imminent, but the Pound subdued against the Australian Dollar today amid a rebound in the ‘Aussie’.

With just two weeks left until the end of the Brexit transition period, analysts are saying that talks continue to move at a very slow pace despite time running out.

The Bank of England’s held interest rates at 0.1% and left its stimulus programme unchanged, though interest rates were overshadowed by Brexit.

The Bank said:

‘The outlook for the economy remains unusually uncertain’

‘It depends on the evolution of the pandemic and measures taken to protect public health, as well as the nature of, and transition to, the new trading arrangements between the European Union and the United Kingdom.’

Australian Dollar (AUD) Continues to Appeal to Investors

On top of further coronavirus vaccine rollouts and risk-on trade, the Australian Dollar has become more appealing today, on the back of a better-than-expected job market report.

Australia’s job market beat forecasts despite the coronavirus pandemic.

Australian unemployment fell to 6.8% from 7%. Many more new jobs were created throughout the month than expected as well.

On top of this, analysts are speculating that continued improvement in Australia’s job market could pressure the Reserve Bank of Australia (RBA) to become more hawkish. According to Gareth Aird, Head of Australian Economics at CBA:

‘At some stage in the future as the labour market continues to tighten, the RBA Board will no longer continue to say that the cash rate is on hold for a further 3 years’

GBP/AUD Outlook: No-deal Brexit Could Cause GBP/AUD Exchange Rate to Plummet

Brexit will remain in focus as with just two weeks until the transition period comes to an end, GBP investors will be hoping for a deal to be reached.

Though if Brexit talks collapse and a no-deal Brexit happens, the Pound could plummet just as fast as it has gained.

This could take GBP/AUD closer to its worst levels in years.

GBP investors will also be keeping an eye on retail sales figures from November tomorrow, with forecasts predicting a contraction in sales, which could cause trouble for Sterling.

Looking ahead the Australian Dollar is likely to remain appealing. As coronavirus vaccine and recovery hopes persist, investors will continue to take risks.

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