Pound Australian Dollar (GBP/AUD) Exchange Rate Sheds Gains as Coal Prices Fall
(Updated 16:40 16/03/23)
The Pound Australian Dollar (GBP/AUD) exchange rate shed the majority of its gains over the course of today. The pairing fell back close to its opening figures with little clear catalyst.
News that the UK government has offered a new pay deal to NHS unions may have lent support to GBP/AUD today. The offer is set to include a one-off bonus for this year and a revised pay deal for 2023/24. Upcoming strikes have been called off for union members to vote on the offer. It’s thought that union heads will recommend members vote in favour of the offer.
A drop in coal prices may also have contributed to GBP/AUD’s downturn over the course of the day. The prospect of a sluggish demand for the commodity weighed on prices.
At time of writing the GBP/AUD exchange rate is at around AU$1.8220, virtually unchanged from this morning’s opening figures.
Original article continues below:
Pound Australian Dollar (GBP/AUD) Exchange Rate Drops after Upbeat Australian Jobs Data
The Pound Australian Dollar exchange rate is falling today. Better-than-expected Australian jobs data overnight may be prompting the losses in the pairing.
The prospect of a pause in policy tightening from the Bank of England (BoE) may also be dampening enthusiasm for GBP/AUD today.
On the other hand, a cautious market mood may be capping gains for the exchange rate. Fears of a collapse in the European banking sector is continuing to send jitters through the markets.
At time of writing the GBP/AUD exchange rate is at around AU$1.8167, which is down roughly 0.4% from this morning’s opening figures.
Australian Dollar (AUD) Boosted by Positive Employment Figures
The Australian Dollar (AUD) is climbing today after strong jobs data overnight. Australia’s employment levels recovered in February after two consecutive months of declines. Employment rose by 64600 last month, well above forecasts of a 48500 increase.
Additionally, February’s unemployment fell by more than expected to 3.5%. The figure was only just above October’s record-low of 3.4%. After the Reserve Bank of Australia’s (RBA) dovish pivot at its last meeting, markets are now unsure as to the central bank’s forward path.
Speaking on the data, ING’s head of Asia-Pacific research Robert Carnell said:
‘Any suggestion that the peak cash rate is just one hike away sounds difficult to accept today.’
Any pricing in of further rate hikes could be adding to AUD’s gains today.
Pound (GBP) Subdued as Market Instability Prompts Further BoE Bet Pullback
The Pound (GBP) is seeing muted movements today. Instability in the European banking sector may be continuing to prompt limited movement in Sterling.
Reports on Wednesday indicated that the Bank of England was in emergency talks over the potential collapse of Credit Suisse. The negative impact on Sterling may be lessened today after news that the Swiss National Bank would be lending up to £44bn to the embattled Swiss lender.
GBP may also be coming under pressure from persistent expectations of a slowdown in BoE policy tightening. Expectations are mixed however, given the turbulence in the bank sector.
James Smith, developed markets economist at ING, said:
‘While the feedthrough to the UK is still unclear, beyond global moves in asset prices, the BoE has made it clear that the bar to pausing rate hikes is now fairly low.’
On the other hand, a return of global risk appetite may be limiting more dramatic losses for GBP today.
The unveiling of the UK’s spring budget on Wednesday could also be dampening enthusiasm for the Pound today. Analysts hailed some of the budget’s short-term solutions, but felt the plan did little to remedy the UK’s long-term economic woes.
GBP/AUD Exchange Rate Forecast: Will BoE Hint at Policy Slowdown?
The Pound will see no other data releases this week. This could leave GBP vulnerable to domestic headlines.
Any further shifts in BoE rate hike bets could prompt movement in Sterling this week. Markets are increasingly pricing in a policy tightening slowdown from the central bank.
The Australian Dollar is likely to be affected by any further shifts in risk appetite this week. Mood shifts in the commodities markets could also affect the ‘Aussie’.
Additionally, any further positive signs from China regarding its reopening could drive movement in AUD.