Pound Australian Dollar (GBP/AUD) Exchange Rate Fluctuates amid Cost-of-Living Crisis
The Pound Australian Dollar (GBP/AUD) exchange rate is trading erratically as the UK’s cost-of-living is set to worsen.
At time of writing the GBP/AUD exchange rate is trading around $1.7350, relatively unchanged from this morning’s opening levels.
Pound (GBP) Under Pressure as Energy Bill Hike Looms
The Pound (GBP) is failing to find much demand today. A lack of major data is leaving Sterling open to worsening domestic woes.
After the inflation rate hit double digits yesterday, the Pound saw a moderate spike on hopes of future interest rate hikes. But the grim reality soon brought the mood back down as recession fears escalated. With energy bill prices set to skyrocket in the autumn, there are fears that two-thirds of UK households could be in fuel poverty by January.
Meanwhile, the ‘summer of discontent’ is set to continue into the autumn. Mick Lynch, RMT General Secretary, has warned that the strikes could go on ‘indefinitely’. Lynch is calling on the UK government to intervene as the cost-of-living crisis is impacting rail workers.
Australian Dollar (AUD) Fluctuated Despite Unemployment Hitting Record Low
The Australian Dollar (AUD) is enjoying mixed success today as the unemployment rate edged lower than expected, boosting the ‘Aussie’.
However, keeping a firm lid on Australian Dollar gains was the unexpected change in employment. The rate plummeted by almost 41,000 versus an expected increase of 25,000 workers. The Australian Bureau of Statistics reported that the drop in employment was the first decline in nine months.
Lending support to the ‘Aussie’ is the positive news out of China, their biggest trade partners, as state-owned newspaper China Security News confirmed that the Chinese government will provide extra stimulus to boost the country amidst the ongoing turbulent economic climate.
Comments from the US Trade Representative’s office could exert downward pressure on the Australian Dollar. Claims of the US and Taiwan will commence official negotiations over a trade initiative is likely to irk China. Renewed geopolitical tensions between China and the US could impact global market sentiment, and in turn the risk-sensitive ‘Aussie’.
Pound Australian Dollar Forecast: UK Retail Sales to Sink the Pound?
Data remains thin on the ground for the rest of the day, market attention will shift to UK retail sales due to print tomorrow. With an expected third consecutive drop in retail sales, recession fears will continue to weigh on Sterling.