Australian Dollar Exchange Rate: Australia Joblessness Increase Sends GBP AUD Higher

Modified: Thursday, 11 July 2013 16:20 BST - Written by John Cameron

STORY LINK Australian Dollar Exchange Rate: Australia Joblessness Increase Sends GBP AUD Higher

The US Dollar has taken a hammering in the markets following events in the States last night. The minutes of the Federal Reserve’s June meeting started the rot which hit at the heart of the Greenback, revealing that only around half of the US central bank’s FOMC policy committee were in favour of a scaling back of its Quantitative Easing programme before Christmas. Investors had been factoring-in a tapering of QE as a near-certainty following the Fed’s previous assertion that, providing its economic forecasts are correct, QE will be scaled down before the end of Q4.

The Fed minutes immediately sent the GBP USD exchange rate back up through the 1.5000 threshold and matters got worse when Fed Chairman Ben Bernanke took part in a Q&A session in Cambridge, Massachusetts shortly after the minutes were published. Bernanke appeared to question the veracity of US employment data, which his Bank has stated that it will use as a gauge of when to alter its monetary policy. The Fed Chairman went on to posit that America’s economy was in need of a long period of ‘highly accommodative monetary policy’. Bernanke’s words sent the GBP USD exchange rate up towards the 1.52000 threshold last night. Cable reached its intraday high of 1.5195 at just before midnight yesterday – this represented a huge move given the pair had been down to as low as 1.4814 during Wednesday’s session.

Elsewhere, the Australian Dollar has lost ground against Sterling so far today in spite of the Fed’s hints that QE may be here to stay. The Pound to Australian Dollar exchange rate (currency : GBP AUD) took a tumble following last night’s Australian employment data. The figures showed a healthier level of job creation than had been anticipated last month, but also unexpectedly revealed an increase in the overall level of joblessness in Oz from 5.6% to 5.7%. GBP AUD has climbed to as high as 1.6441 during today’s session as a result.

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