Pound to Australian Dollar: GBP/AUD Exchange Rate Gains as UK House Prices Grow in January

January 19, 2015 - Written by Tim Boyer

STORY LINK Pound to Australian Dollar: GBP/AUD Exchange Rate Gains as UK House Prices Grow in January

The Pound advanced against the Australian Dollar after a major bank reduced its expectations for the price of iron ore in both 2015 and 2016. In addition, UK House Prices grew in value by 1.4% in January, offering Sterling a little support. Industry expert Miles Shipside stated: ‘Early 2015 statistics currently point in the right direction for home-movers, with the chancellors early Stamp Duty Christmas present perhaps being the spur for people making New Year resolutions to get on with moving. There are more positive signs of early-bird activity rather than pre-election jitters or economic worries deterring prospective movers. However, we are only a few days into the year and it remains to be seen whether this initial flurry is sustained.’

Although 1.4% growth doesn’t sound like a giant leap, it’s a nice rebound from December’s -2.2%—especially in January which has a reputation for being relatively quiet month for the housing market. Furthermore, the annual figure was pulled higher from 7.0% to 8.2%. However, UK politics could shake the Pound in the near future as political party debate becomes more heated. Last year saw controversial party UKIP win two seats in parliament—a move that some suggested showed a big political change-up was on its way. As we move closer to May, the Pound could fluctuate dependent on political uncertainty.

Meanwhile, Australian New Motor Vehicle Sales also recorded growth on Monday when it emerged that December had seen 3.0% expansion—another favourable development after the previous and positively revised -0.5%. However, the annual figure remained in contraction at -1.0%. The data provoked concern from some experts who suggest that overall Australian economic growth has slowed. Although some speculate that a weaker Australian Dollar has contributed toward less buoyant sales, others have argued that the inflation figures have showed more affordable motors.

Meanwhile, the week ahead could see some interesting Pound to Australian Dollar movement. Sterling can expect a day of fluctuations on Wednesday with the release of UK Employment Change and Unemployment Rate ecostats. The UK unemployment sector is expected to decrease in the three months through November to 5.9% from 6.0%. Meanwhile, Employment Change numbers are predicted to show 74K new jobs created in the same time period. Bank of England meeting minutes are also published on Wednesday and will be scrutinised by investors hoping for a whiff of interest rate hike talks. The last four monetary policy meetings have seen two of the nine members vote in favour of immediate rate hikes.

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