Pound Australian Dollar (GBP/AUD) Exchange Rate Edges up as Aussie Unemployment ‘Needs to Fall Below 4.5%’
UPDATE: The Pound Sterling Australian Dollar (GBP/AUD) exchange rate rose and the pairing is currently trading at an inter-bank rate of AU$1.8333.
On Wednesday, the Reserve Bank of Australia’s (RBA) Assistant Governor, Luci Ellis gave a speech in Melbourne.
Ellis used the speech to argue the unemployment rate would need to fall below 4.5% in order to see inflation rise to the bank’s target.
Plummeting unemployment would also prevent the RBA from making even larger interest rate cuts following the recent slash of rates to an all-time low of 1.25%.
It is likely this dampened sentiment in the ‘Aussie’ as unemployment is currently at 5.2% and is only predicted to edge down to 5.1% in May.
Pound Australian Dollar (GBP/AUD) Exchange Rate Edges, Aussie Consumer Confidence Falls following RBA Rate Cut
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate has crept higher today and the pairing is currently trading at an inter-bank rate of AU$1.8330.
Despite the Reserve Bank of Australia’s (RBA) attempts to lift the gloom that surrounded the economy, consumer confidence has slumped.
On Wednesday it was revealed Westpac’s consumer confidence reading tumbled from 0.6% to -0.6% in June, meaning consumers are feeling more pessimistic.
Commenting on the report Westpac’s Matthew Hassan said:
‘Responses over the survey week show a marked drop off after the Reserve Bank’s official rate cut.
‘This is a disappointing result given the cut in official interest rates this month and suggests deepening concerns about the economy have outweighed the initial boost from lower rates.’
Pound Sterling (GBP) Exchange Rates Supported as UK Unemployment Remains at 44-Year Low
Pound Sterling (GBP) exchange rates derived some support on Tuesday as data revealed that the UK unemployment rate beat forecasts and remained at a 44-year low.
The official rate remained at 3.8% while the number of people in employment jumped to a record high in the three months to April.
Added to this, female employment rose to a record high of 72% following changes to the state pension age.
Compared to the previous quarter, female employment rose by 60,000 while male employment slipped by 27,000.
Commenting on this, PwC Chief Economist, John Hawksworth said:
‘This is consistent with a longer-term trend towards a narrowing gender employment gap.
‘Male employment is still higher at around 80%, but this is well below its historical highs of over 90% back in the 1970s.’
Pound Sterling to Australian Dollar Exchange Rate Outlook: Will Better Australian Unemployment Figures Buoy AUD?
Looking ahead to the start of Thursday’s session, the Australian Dollar (AUD) could rise against the Pound (GBP) following the release of the latest consumer inflation expectations.
If consumer inflation expectations rise higher than expected in June, it could provide an upswing of support for the ‘Aussie’.
Meanwhile, the Australian Dollar could rally following the release of the latest Australian unemployment data.
If the unemployment rate edges down further than expected in May, the Pound Australian Dollar (GBP/AUD) exchange rate could slide.