(Updated 16:35 18/01/22)
The Pound Australian Dollar (GBP/AUD) exchange rate has fallen close to its opening position today, as a risk-averse market attitude placed pressure on both currencies. This followed a boost for the Pound’s (GBP) this morning after the release of positive employment data.
At time of writing the GBP/AUD exchange rate is at around $1.8913, virtually unchanged from this morning’s figures.
Pound Australian Dollar Rises Following Boost from UK Employment Data
The Pound Australian Dollar (GBP/AUD) exchange rate has trended upward since the opening of this morning’s session. The currency pair was buoyed by a risk-averse trading mood and positive UK jobs data helped strengthen the Pound (GBP).
At time of writing the GBP/AUD exchange rate is at around $1.8971, which is up roughly 0.2% from this morning’s figures.
Pound (GBP) Climbs as UK Adds Record Number of Employees to Workforce
The Pound has climbed against many of its riskier competitors today amid a risk-off market mood, as well as receiving an additional boost following Tuesday morning’s employment figures.
The data collected by the Office for National Statistics (ONS) showed a record 184,000 staff added to the country’s workforce in December. The UK’s unemployment rate fell to 4.1% by the end of November, a potentially reassuring sign that the impact of the end of the country’s furlough scheme has been minimal.
Whilst ministers have been quick to cite the figures as evidence of a ‘thriving’ job market, record high vacancies and real wages falling behind inflation have led to a less optimistic outlook from market analysts.
Stephen Evans, chief executive of Learning and Work Institute, had the following to say on the jobs data:
‘The year ahead will be dominated by the cost of living crunch and labour shortages. Today’s data shows prices rose faster than wages in November. With higher inflation and tax rises still to come, the Government needs to help households: the cost of living crunch has only just begun.’
The figures have further heightened speculation of an interest rate hike by the Bank of England (BoE) following their 3 February meeting. Markets have priced in a rate hike as being increasingly likely, and the Pound could see a further boost from speculative bets by investors.
Sterling may see some headwinds from the realm of domestic politics today as Prime Minister Boris Johnson faces repeated calls for his resignation following additional reports of illegal gatherings at 10 Downing Street.
Australian Dollar (AUD) Drops as Country sees Deadliest Day of Pandemic
The Australian Dollar (AUD) has fallen against its rivals today amid a risk-off trading sentiment and record-high hospitalisation levels as the country battles an Omicron-led surge in Covid-19 cases numbers.
Australia suffered its worst day since the start of the pandemic on Tuesday as the country’s daily death toll hit a new record of 77, surpassing the previous national high of 57. Despite daily infections falling to 73,000, hospitalisation rates have been pushed up to record levels as some states have had to cancel non-urgent procedures and recall staff on leave.
A recent drop in iron ore prices is also likely to have pushed the ‘Aussie’ downward today, as a slowdown in the Chinese economy has weakened demand for the commodity.
GBP/AUD Forecast: Will UK Inflation Figures Force BoE’s Hand?
Looking to the week ahead, Wednesday could place further pressure on the BoE to raise rates as the rate of inflation for December is forecast to rise. Should these figures print as expected then the Pound could be boosted by an increased chance of an interest rate hike.
An expected dip in January’s consumer confidence and December’s retail sales could limit any gains for Sterling however, and may cause concern for UK growth prospects in the fourth quarter.
Australia’s consumer confidence index for January is expected to fall as the country continues to battle a surge in Covid-19 infections. These figures could push AUD down, although Thursday’s forecast fall in unemployment could help limit losses for the currency.