Pound Australian Dollar (GBP/AUD) Climbs amid Weaker-than-Forecast Aussie Labour Market
The Pound Australian Dollar (GBP/AUD) exchange rate is strengthening considerably on the back of weaker-than-expected Australian labour market data.
At time of writing, the GBP/AUD exchange rate is around $1.7902, a 0.69% jump from this morning’s opening levels.
Australian Dollar (AUD) Soured on Pared RBA Rate Hike Bets
The Australian Dollar (AUD) is struggling for demand this morning as the latest labour market data could bolster the case for slower rate hikes.
Australia’s resilient labour market turned sour as headline employment change unexpectedly declined by 14.6k. The figure widely missed forecasts of a 22.5k gain and marked the first drop in employment since July. Full-time employment remains robust with an increase of 17.6k, as Lauren Ford, Head of Labor Statistics at ABS, comments:
‘The strong employment growth through 2022, along with high participation and low unemployment, continues to reflect a tight labour market.’
However, unemployment remains close to 50-year lows as it climbed modestly to 3.5%. A cooling labour market could finally bring an end to the Reserve Bank of Australia’s (RBA) aggressive tightening policy. AUD investors could be getting jittery over a potential slowing of its rate hikes.
Elsewhere, concerns over a further spreading of Covid in China could be dampening global market moods. Chinese President Xi has warned that mass travelling over the lunar new year holiday could exacerbate the surge of Covid cases as families travel across the country to visit family.
Across the Tasman Sea and news of New Zealand Prime Minister Jacinda Ardern stepping down could be further weighing on the Australian Dollar. Citing that she had ‘no more in the tank’ to lead the country, Ardern will be stepping down. The prospect of political uncertainty in New Zealand does little to inspire investors.
Pound (GBP) Undermined by Ever-Present Domestic Headwinds
Meanwhile, the Pound (GBP) is experiencing mixed success against its peers this morning amid a lack of economic data. Domestic woes are never too far away to dampen moods.
News of further industrial action could be limiting gains from a more cautious market mood. With teachers due to strike at the beginning of next month, industrial action continues to weigh heavily on the UK economy.
The cost of rail strikes to the UK is said to be more than £1bn, and settling would have been far cheaper, according to a government minister. Huw Merriman, Rail Minister, further commented that the need for reform had to take place.
Pound Australian Dollar Exchange Rate Forecast: UK Retail Sales to Boost Sterling?
Looking ahead, the Pound Australian Dollar exchange rate could see a further boost if UK retail sales print to forecast. Expected to bounce back from a 0.4% decline in November, sales over the festive period are expected to have climbed 0.5%.
Meanwhile, the Australian Dollar could remain under pressure amid a lack of economic data. Risk sentiment will continue to dominate movement, and any further developments in Ukraine or China could impact the ‘Aussie’.