Pound Australian Dollar (GBP/AUD) exchange rate flat amid mixed data
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning, following the release of some mixed Australian economic data.
At the time of writing the GBP/AUD exchange rate is trading at A$1.9321, virtually unchanged from this morning’s opening rate.
Australian Dollar (AUD) rangebound amid downbeat employment data
The Australian Dollar (AUD) is trading in a narrow range this morning, following some worse-than-expected employment data.
Australia reported employment fell by 65,100 last month, following an upwardly revised 72,600 increase in November. This was well behind forecasts for an increase of 17,600, and marked the first fall in employment in three months.
However Australian unemployment held steady 3.9% in December. Alongside Australia’s better-than-expected consumer inflation expectations, this helped to keep AUD exchange rates afloat.
Economists at Commerzbank commented:
‘Australian employment figures were much worse than expected. With job losses of around 65 thousand, the report was the worst since the peak of the coronavirus pandemic. However, there are also some less negative signals. The unemployment rate has remained constant, thanks to the sharp drop in the participation rate.’
The mixed data, namely the shock drop in employment change, has sparked speculation amongst AUD investors that the Reserve Bank of Australia (RBA) could begin cutting interest rates earlier than expected, limiting demand for the ‘Aussie’ this morning.
Pound (GBP) muted amid lull in UK data
The Pound (GBP) is trading sideways against most of its peers this morning, as an absence of notable data leaves Sterling vulnerable to market mood and risk appetite.
Following the Pound’s gains yesterday on the back of stronger-than-expected inflation figures, GBP has struggled to replicate the same success so far this morning.
With a slight improvement in market mood this morning, and sentiment cautiously upbeat, Sterling’s position as an increasing risk sensitive currency may offer support, should risk appetite continue to rise.
GBP/AUD exchange rate forecast: Slide in UK retail sales to dent Pound?
Looking ahead, the Pound Australian Dollar exchange rate could be faced with fresh selling pressure tomorrow, as the UK publishes its latest retail sales data.
Economists forecast that retail sales will have plummeted from 1.3% to -0.5% in December. A sharp fall in consumer spending may weigh on the Pound as it stokes recession fears and potentially revives Bank of England (BoE) rate cut bets.
On the other side of the world, Australian data is in short supply for the rest of the week, which could see the ‘Aussie’ trade on risk dynamics alone.
Should market sentiment continue to improve, this could see AUD strengthen on its position as one of the riskier currencies.