Pound Australian Dollar (GBP/AUD) Exchange Rate Climbs on UK Jobs and Inflation

The Pound Australian Dollar (GBP/AUD) exchange rate climbed last week as UK data exceeded expectations. Meanwhile, a lack of AU data and dovish comments from the Reserve Bank of Australia (RBA) left the Australian Dollar exposed to losses.

What’s Been Happening: UK Unemployment Falls, Chinese Headwinds Subdue AUD

The Pound Australian Dollar exchange rate traded low at the beginning of last week as Sterling was subdued on Brexit negotiations and GDP headwinds.

Meanwhile, the ‘Aussie’ found support on positive Chinese data, as CN retail sales and industrial production printed above forecasts.

Upbeat employment data buoyed the Pound on Tuesday, as UK unemployment fell to 4.3% in the three months to September, down from 4.5% the month before. The Australian Dollar dropped against its peers on dovish RBA comments.

Midweek, GBP extended its gains as UK inflation exceeded expectations, fuelling hopes of an imminent rate hike; a lack of AU data kept AUD subdued.

Towards the end of the week, GBP/AUD dipped slightly as the Pound experienced some profit-taking; mentions of article 16 subdued GBP on Friday. The Australian Dollar also sustained losses, as downbeat news from China forecast a ‘spending slowdown’.

Into this week, Pound sentiment is low: Brexit headwinds exert GBP downside, as Northern Ireland negotiations fail to reach a resolution.

Three Things to Watch Out for This Week

  1. PMI Data

Flash PMI data this week is forecast to show recovery in Australia, while UK data looks to weaken, potentially inspiring GBP headwinds.

  1. Central Bank Speeches

Speeches from BoE and RBA officials may influence trading, with a hawkish tone lending possible support.

  1. Australian Retail Sales

Australian retail preliminaries for October print on Friday: the expected increase will likely inspire AUD tailwinds.

Pound Australian Dollar Forecast

GBP/AUD is set to trade on PMI data in the first half of this week; RBA speeches may inspire headwinds if the central bank retains the dovish tone struck last week.

Later in the week, data from the Confederation of British Industry (CBI) may uplift GBP, although Pound strength could be countered on Friday by upbeat AU retail sales.

Olivia Evershed

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