GBP/AUD Skyrockets Following Saunder’s Rate Hike Hints
(Updated 14:10, 15/7/21) he Pound Australian Dollar (GBP/AUD) exchange rate has roared higher this afternoon, catapulting the pairing to a one-year high of AU$1.8618.
This sudden improvement in the GBP/AUD exchange rate comes courtesy of a speech by Bank of England (BoE) policymaker, Michael Saunders, in which he suggested that discussions regarding the tapering of the bank’s assets purchases would be forthcoming, whilst also hinting at the possibility of an early interest rate hike.
Meanwhile, the ‘Aussie’ has come under some notable selling pressure this afternoon, as a rebound in the US Dollar (USD) as well as ongoing concerns over the resurgence in global coronavirus cases has soured market sentiment
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Pound Australian Dollar Exchange Rate Muted as UK Jobs Report Fails to Impress
The Pound Australian Dollar (GBP/AUD) exchange rate is edging lower this morning in response to the UK’s latest jobs report.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8508, close to its worst level this week.
Pound (GBP) Subdued Following Disappointing Employment Figures
The Pound (GBP) is struggling to find support this morning, after the UK’s latest employment figures underwhelmed.
According to data published by the Office for National Statistics (ONS), the UK’s jobless rate unexpectedly rose from 4.7% to 4.8% in May, the first rise in unemployment since December last year.
The accompanying earnings figures made for better initial reading, with headline wage growth rocketing up from 5.6% to a record high of 7.3% in May.
However, analysts suggests that underlying wage growth is actually much lower, with the figures being distorted by the large number of lower paying jobs which were lost during the pandemic.
Jonathan Athow, Deputy national statistician at the ONS commented:
‘The analogy I like to use is height. If the shortest person in a room leaves, the average height of those remaining will rise. No-one has got taller, but the composition of the people in the room has changed, pushing up average height. In terms of average earnings, if someone paid less than the average (£540 a week) loses their job, other things equal, the average earnings will increase.’
On a more positive note however, were June’s payroll numbers, which rose by 356,000 during the first full month in which hospitality venues were able to operate.
Australian Dollar (AUD) Buoyed by Upbeat Jobs Report
Meanwhile, the release of Australia’s own jobs report overnight, has helped provide a leg up to the Australian Dollar (AUD) this morning.
While employment growth was a little softer-than-expected last month, the Australian Bureau of Statistics (ABS) reported that the unemployment rate dropped to 4.9%, down from 5.1% in May and beating forecasts for a more modest decline to 5%.
This is Australia’s lowest jobless rate since 2011, which is likely to be an encouraging sign for the Reserve Bank of Australia (RBA), although it’s unlikely to push the bank towards tightening its monetary policy at this time, a fact which appears to be limiting the upside in AUD exchange rates.
Pound Australian Dollar Exchange Rate Forecast: Boris Johnson Speech in Focus
Looking ahead, a speech from Boris Johnson outlining his post-pandemic vision for the UK economy could provide some fresh impetus for the Pound Australian Dollar exchange rate later today.
The Prime Minister is expected to speak about ‘leveling-up’ the whole country and other measures to help the UK economy bounce back from the pandemic, but will this be enough to cheer GBP investors?
At the same time, ongoing concerns over Australia’s coronavirus outbreak could place renewed pressure on the ‘Aussie’ through the latter half of this week.