Pound Australian Dollar (GBP/AUD) Exchange Rate
(Updated 16:48 13/12/22)
The Pound Australian Dollar (GBP/AUD) exchange rate slumped over the course of the day. A healthy risk appetite pushed the currency pair lower as it stregnthened the Australian Dollar (AUD). A rise in iron ore prices also saw GBP/AUD fall.
The strong risk-on mood was motivated by cooler-than-forecast US inflation figures. The pair’s gains were limited by persistent market bets on hawkish action from the Bank of England (BoE) this week.
At time of writing the GBP/AUD exchange rate was at around AU$1.7999, which is down roughly 0.9% from this morning’s opening figures.
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Pound Australian Dollar (GBP/AUD) Exchange Rate Trades Narrowly amid UK Labour Market Cooldown
The Pound Australian Dollar (GBP/AUD) exchange rate is trending sideways today. Strong UK wage growth data and a downturn in Australian business confidence may be underpinning the pair.
On the other hand, other UK jobs data indicating a cooler labour market may be weighing on GBP/AUD.
At time of writing the GBP/AUD exchange rate was at around AU$
Pound (GBP) Firms as Strong Wage Growth Hints at Further BoE Rate Hikes
The Pound (GBP) is edging higher today. Mixed jobs data kept gains for Sterling limited amid signs of a cooling labour market.
UK unemployment ticked higher to 3.7% in October. Along with a drop in vacancies, the data largely pointed to a cooling labour market. This may be prompting some pullback in Bank of England (BoE) rate hike bets today.
Widespread industrial action taking place today may also be keeping pressure on the Pound. The RMT rail union has begun 40 hours of strikes after failing to reach a pay agreement with operator National Rail.
The latest wage growth data lent some support to bets on further rate hikes from the BoE however, and could be helping GBP climb today. Regular pay rose above forecasts to 6.1% which was its biggest gain since 2001.
Australian Dollar (AUD) Pushed Higher by Risk-On Mood
The Australian Dollar (AUD) is firming against its peers today. A return of global risk appetite is bolstering the ‘Aussie’ today despite mixed data releases.
An uptick in December’s consumer sentiment may also be adding to AUD’s gains today. The index rose by 3% to 80.3 in December. Experts highlighted how reduced household spending saw the index slow this month, however.
This pessimism may have added to a fall in Australian business confidence in December. The data may be capping gains for AUD today. November’s data fell to -4, its first fall below 0 since December 2021.
Surging Covid-19 cases in China may also capping gains for the ‘Aussie’ today. After the country pared back many of its Covid-19 restrictions last week, businesses are now struggling with a high levels of staff illness.
GBP/AUD Exchange Rate Forecast: Will BoE Hike Rates as Forecast?
Looking ahead to the rest of the week for the Pound, Wednesday’s inflation data could see the currency slip if the figures print as forecast. November’s inflation is expected to tick lower. Whilst the data could help ease pressure on UK households amid the UK’s cost-of-living crisis, markets may pare back BoE rate hike bets.
The BoE’s interest rate decision on Thursday could also prompt losses in Sterling. The expected 50bps rate hike has largely been priced in by markets. Investors will be looking to the central bank’s forward guidance for any signals of its future rate hike plans. A dovish pivot could weigh on GBP.
Finally for the Pound, a slowdown in November’s retail sales figures on Friday could also keep pressure on the currency.
For the Australian Dollar, a speech from RBA Governor Philip Lowe later today could prompt movement in the currency. Despite hiking interest rates by 25bps at their last meeting, the RBA has been consistently dovish in tone.
On Thursday, unemployment data could boost the ‘Aussie’ if it remains unchanged at 3.4% as forecast. Investors may see the data as an indicator of a tight labour market. A predicted uptick in private sector output could also push AUD higher.