Pound Australian Dollar (GBP/AUD) Exchange Rate Flat amid Muted AU Jobs Data
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in narrow boundaries this morning, following mixed Australian labour data.
At the time of writing, GBP/AUD is trading at around AU$1.9091, showing little movement from the morning’s opening rates.
Australian Dollar (AUD) Stumbles amid Middling Employment Data
The Australian Dollar (AUD) is under pressure this morning, following a muddled set of unemployment data.
While 54,900 jobs were added in October, the unemployment also rose to 3.7%. This was due to the average number of jobs created falling, alongside a slowdown in hours worked.
Bjorn Jarvis, the Head of Labour Statistics at the Australian Bureau of Statistics, commented:
‘Looking over the past two months, these increases equate to average employment growth of around 31,000 people a month, which is slightly lower than the average growth of 35,000 people a month since October 2022.’
As such, the mixed data paints an unclear picture of the Australian labour market. The Australian economy could be operating beyond its current capacity, but it may also be setting up for a fall.
The Reserve Bank of Australia’s (RBA) path forward remains unclear, with it now below a 50% chance of another hike in December.
Elsewhere, another drop in Chinese house prices could be bringing additional headwinds for the ‘Aussie’. China’s property sector has remained downbeat, and further falls in prices could prove worrisome for investors.
As a Chinese proxy-currency by nature, the ‘Aussie’ may be unable to gain ground amidst growing concerns about the sector.
Pound (GBP) Rudderless as Investors Pare Back BoE Hike Bets
The Pound (GBP) is largely rudderless this morning, as a lack of data keeps the focus on yesterday’s inflation data.
Headline and core inflation eased more than expected yesterday, leading to a sell-off in Sterling. Investors are continuing to recalibrate their expectations on further tightening from the Bank of England (BoE) this morning.
Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE at ING, explained:
‘Yesterday the market moved to price the first full 25bp BoE cut in June next year and had 78bp of easing priced in by the end of the year. Having switched to forward guidance at the last BoE meeting, the market will now be on the lookout for this language changing.’
Additionally, bearish trade this morning is likely keeping the increasingly risk-sensitive Pound wrongfooted.
Pound Australian Dollar Exchange Rate Forecast: UK Retail Improvement to Support GBP?
Looking ahead for the Pound, tomorrow brings the release of the latest retail sales data. In October, economists anticipate a 0.3% expansion which could show improving consumer spending.
Due to the importance of the UK’s retail sector, and recent significant falls, improvements could bring cheer to GBP investors. However, if sales remain tepid at best, GBP may weaken.
For the Australian Dollar, risk appetite is likely to be the primary driver of movement, due to a short supply of other data.
As such, AUD may be left vulnerable to shifts in risk appetite. If trading conditions worsen, the risk-sensitive ‘Aussie’ may fall against safer peers such as Sterling.
However, if bullish trade emerges, GBP/AUD could narrow or weaken as investors seek out riskier investments.