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Pound to Australian Dollar Exchange Rate Forecast: Aussie Labour Data and UK GDP and Inflation

May 16, 2018 3:04 pm | Modified September 4, 2018 7:18 am
AUD, GBP | BY Ashleigh Fox

The Pound fell against the Australian Dollar (GBP/AUD exchange rate) at the start of Thursday’s European trading as investors assessed Brexit and took Australian employment data into account. Overnight, Australia released mixed labour market data; the Participation Rate edged up from 65.5% to 65.6%, causing the Unemployment Rate to creep higher to 5.6% from 5.5%. 

Meanwhile, the Australian Employment Change figure came in at 22.6K in April, above the 20.0K forecast. However, the March reading was negatively revised lower into contraction territory, to -0.7K. The Reserve Bank of Australia (RBA) will take these figures into account in upcoming monetary policy meetings, it’s thought interest rates will remain on hold until the third or fourth quarter of 2019. The Pound to Australian Dollar (GBP/AUD) exchange rate is currently trending at 1.7964. 

Above update provided at 10:18 am, 17/05/18

The Pound tumbled against the Australian Dollar (GBP/AUD) as well as a basket of other major currencies on Wednesday, as investors favoured other currencies.

Australian Employment Data Ahead – Could the AUD Exchange Rate Climb?

There could be more opportunity for the Aussie Dollar to rise against Sterling overnight when Australia publishes labour market data. The Australian employment change number is expected to come in at 20.0K in April and would be an improvement on the previous 4.9K. The Unemployment Rate figure is expected to remain stable at 5.5%, and it’s hoped that full-time employment change figures will print favourably after the March figure contracted by -19.9K. The Consumer Inflation Expectation will also be printed on Thursday.

The Reserve Bank of Australia (RBA) has just released a study which has shown that there is ‘no evidence’ that small rises in the minimum wage creates fewer jobs in the market or cause employers to downwardly adjust hours.

Wednesday has seen the Australian Wage Price Index remain at 2.1% on the year in quarter one, while the quarter-on-quarter figure stayed at the previous 0.5% rather than climbing in line with forecasts to 0.6%.

Pound Exchange Rate could Jump if UK Growth and Inflation Inspires Markets

While this week is a relatively quiet one for UK economic data, next week could see things heat up for the Pound, in both the short and long-term. Influential inflation rate and Gross Domestic Product (GDP) data will be released, and could give some indication on the economy and whether the Bank of England (BoE) might have a need to upwardly adjust interest rates in coming months.

The last UK inflation figure came in at 2.5% in March, while UK growth trundled along at 0.1% on the quarter, and the annual number reached 1.2%. Stronger labour market and growth numbers could give the BoE a good reason to consider hiking interest rates in its August Monetary Policy Committee (MPC) meeting after weak data saw the central bank hold rates when it adjourned in May.

The Pound to Australian Dollar (GBP/AUD) exchange rate is trading at 1.7965, around -0.62% lower. The Pound has reached session highs of 1.8109 against the Aussie in European trading so far.

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