Pound US Dollar Exchange Rate News: GBP/AUD Trades Following Mixed UK Jobs Data

September 13, 2022 - Written by John Cameron

STORY LINK Pound US Dollar Exchange Rate News: GBP/AUD Trades Following Mixed UK Jobs Data

GBP/AUD Exchange Rate Muted Following UK Employment Figures

The Pound to Australian Dollar (GBP/AUD) exchange rate was directionless during early morning trade on Tuesday underpinned by poor domestic headlines.

At time of writing the GBP/AUD exchange rate traded at around $1.6967, barely changed from Tuesday’s opening level.

Pound (GBP) Fluctuates on Mixed UK Data

The Pound (GDP) fluctuated on Tuesday, following the release of the UK’s latest jobs figures.

July’s jobs report revealed that unemployment had dropped to its lowest since 1974. However, real wages continued to fall behind inflation, exasperating the cost-of-living crisis.

Throughout the summer months the public sector was hit particularly hard by pay growth. Research found that pay in the public sector only grew by 2%, compared to 6% in the private sector.

Sterling’s struggle to find momentum also came after workers at Felixstowe announced another strike. Felixstowe is the UK’s largest container port and will begin an eight-day strike on the 27th of September.

This fresh strike has been triggered by workers feeling ‘overwhelmingly rejected’ their proposed pay deal of 7%, which is real terms pay cut.

Bonny Morton, a spokesman for Unite hopes that the disruption caused will get the company’s attention:

‘The latest strike action is entirely of Felixstowe’s own making. Rather than seeking to negotiate a deal to resolve the dispute, the company instead tried to impose a pay deal.’

It’s feared more strike action at Felixstowe could severely disrupt the UK economy, particularly as it could impact retailers’ preparations for the holiday season.

Australian Dollar (AUD) Mixed as Risk-Off Mood Kept Investors at Bay

The Australian Dollar (AUD) was mixed on Tuesday as a risk off sentiment kept the ‘Aussie’ directionless against some currencies and up against others.

Investors pulled back from the risk-sensitive currency on Tuesday as a lack of significant data and unchanging commodities prices left the currency suppressed.

Commodity exports have helped maintain the level of growth within the Australian economy in recent months.

However, economists have predicted a slow down in growth as the Reserve Bank of Australia (RBA) increased interest rates last week.

Brendan Rynne, chief economist for KPMG said in an interview:

‘There is a slowdown, if not here already, then it’s certainly coming’

‘And that slowdown’s most likely going to accelerate as the RBA continues to feather the brakes with regard to lifting the cash rate back up from the extraordinarily low levels that we’ve had during more recent times.’

Platooned commodity prices and a fear of a slowing economy kept AUD investors on the backfoot on Tuesday.

A lack of information from China also dragged on the currency. The Australian Dollar is used as a proxy currency for China. No significant movement in the Asian market meant that AUD dropped in value.

The Chinese economy is slowing down, which is concerning investors. The world’s second largest economy missed their growth target of 5.5%, instead landing on 3%. This paired with aggressive covid lockdowns has dragged on Chinese trade and by extension AUD.

GBP/AUD Exchange Rate Forecast: Sterling to be Undermined by Rising UK Inflation?

The Pound Australian Dollar (GBP/AUD) exchange rate could falter on Wednesday with the release of the UK’s latest inflation data.

UK inflation is currently at 10.1% and is expected to rise to 10.2%, with another acceleration likely to raise concerns over the UK’s cost of living crisis.

On the other hand the continued untick in domestic inflation is likely to place mores pressure on the Bank of England (BoE) to be more aggressive in hiking interest rates, Which could lend some support to Sterling.

Australia’s unemployment rate for August prints on Thursday, and is expected to remain unchanged. The RBA is also set to release a bulletin on Thursday, could positive news concerning interest rates temporarily boost AUD?

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Australian Dollar Forecasts