GBP/AUD Exchange Rate Rises, UK GPD Poised for Positive Growth
(Updated: 19/08/2021 16:12) The GBP/AUD exchange rate continued to grow this afternoon as a combination of factors – including the avoidance of a no-deal Brexit and an intensive Covid-19 vaccination roll out – has positively positioned UK GDP growth. The pairing is currently trading round AU$1.90.
Giles King, writing for iNews, comments:
‘Despite uncertainties surrounding Covid-19, the UK economy is projected to deliver significant GDP growth over the next five years and should find itself among the fastest growing European countries, underpinned by strong consumer spending trends.
‘The avoidance of a no-deal Brexit has removed a major downside risk for the UK economy.
‘Business confidence is high, and companies are likely to resume investment after adopting a “wait and see” approach in recent years.’
The Australian Dollar (AUD) has also continued to suffer today, with Australia’s ‘Zero Covid’ approach denting confidence in the nation’s economic recovery.
Original article continues below:
GBP/AUD Exchange Rate Edges Higher Following Promising Jobs Data
The Pound Australian Dollar (GBP/AUD) exchange rate rose by 0.5% today as the outlook for the UK economic continues to improve, with the latest Lloyds Bank Recovery Tracker revealing an upturn in economic growth last month. The pairing is currently fluctuating around AU$1.90.
Added to this, UK job vacancies continue to rebound as the nation’s labour market recovers from the coronavirus pandemic.
ONS deputy statistician Jonathan Athow explains:
‘This time last year we had millions of people on furlough many getting 80% of their wages, other people having their hours cut, and that pushed wages down.
‘So when we look at wages this year, when people have come back from furlough, it’s really been boosted by the fact that last year wages were quite low. Some of this group was just wages returning to the level before the pandemic.’
Athow also added that the ‘world of work continues to rebound robustly’.
As a result, demand for Sterling has risen on growing hopes for the nation’s economic recovery in the months ahead.
However, daily Covid-19 infections continue to rise across Britain, leaving many GBP investors feeling cautious.
After all, cases are expected to rise in autumn, posing the threat of further lockdown restrictions.
Australian Dollar (AUD) Exchange Rate Sinks Despite Falling Australian Unemployment
The Australian Dollar (AUD) struggled to rise today despite the release of the latest Australian unemployment rate report for July, which fell to a better-than-expected 4.6% from June’s 4.9%.
Bjorn Jarvis, head of labour statistics at the ABS, was however sceptical, saying:
‘The fall in the national unemployment rate in July should not necessarily be viewed as a sign of strengthening in the labour market – it’s another indication of the extent of reduced capacity for people to be active in the labour market, in the states with the largest populations.
‘We’re in lockdown, then out again. We need jobkeeper 2 [wage subsidies], to keep workers connected to their place of work, and give them some peace of mind and confidence about the future.’
Asian equity markets are also down today following the Federal Reserve’s minutes from their latest policy meeting.
The Fed indicated that they could start slowing asset purchases by year-end, while some policymakers remained uncertain, saying they would prefer to wait until 2022.
As a result, global economic uncertainty has dragged down demand for the risk-sensitive ‘Aussie’.
GBP/AUD Exchange Rate Forecast: RBA Speech in Focus
Australian Dollar (AUD) traders will be awaiting tomorrow’s speech from Christopher Kent, the assistant governor at the Reserve Bank of Australia (RBA).
Could dovish commentary about the state and future of the Australian economy further drive down the ‘Aussie’?
Pound (GBP) investors will eye tomorrow’s release of the GfK consumer confidence gauge for August. An uptick could drive-up the GBP/AUD exchange rate.
However, GBP traders are more likely to eye Covid-19 developments. Any indications that daily infection rates are rising would be Pound-negative.