Australian Dollar Rate Today: GBP to AUD Volatile, Sterling Suffers UK Slowdown Speculation

October 6, 2014 - Written by Tim Boyer

STORY LINK Australian Dollar Rate Today: GBP to AUD Volatile, Sterling Suffers UK Slowdown Speculation

The Pound to Australian Dollar exchange rate (GBP/AUD) trended lower on Monday as Sterling weakness continues. The belief that the UK economic recovery is slowing has caused investor sentiment in Sterling to wane.

Australia released ANZ Job Advertisements figures on Monday which showed a rise for the fourth consecutive month in September of 0.9%.

The data shows improvement in the Australian labour market with an average of 137,087 jobs advertised per week throughout September.

ANZ economist Warren Hogan commented: ‘The gradual improvement in ANZ Job Ads is an encouraging sign that labour demand is solidifying. Other leading indicators of labour demand such as business conditions, profitability and capacity utilisation also point to some trend improvement.’

Aus Dollar Bolstered by Improving Labour Market

The Australian Dollar has experienced a turbulent ride of late, falling dramatically below 90 US Cents versus the US Dollar (USD) and then plummeting to a four-year low of 86.43 US cents on Friday.

This week will prove highly influential for the Australian Dollar with the Reserve Bank of Australia (RBA) announcing its Bank Rate Decision on Tuesday.

The RBA is currently expected to hold the interest rate at 2.50% in October as weakness in the broader economy continues; however, any discussion about the ‘Aussie’ or the economy could alter the AUD exchange rate.

HSBC economist Paul Bloxham stated: ‘A lower [Australian] Dollar will help support Australia’s great rebalancing act, shift[ing] growth to non-mining from the mining sector. On Tuesday, I suspect we will see a language change from [the RBA], because this is going to support the economy rebalancing.’

Pound Rate Today: Sterling Pressured Lower as Pace of Recovery Slows

The UK release New Car Registrations figures on Monday, which saw a 5.6% rise on a yearly basis, the strongest September statistic in 10 years.

The Society of Motor Manufacturers and Traders (SMMT) believe that confidence in the UK surrounding the economic recovery has helped boost new sales.

On its current trajectory, the British economy is on target to set a new record of new car registrations in 2014 (2.45 million), the most since 2004.

SMMT Chief Executive Mike Hawes commented on the result: ‘September’s strong performance underlines the continuing robustness of the UK new car market, particularly in the context of last September’s bumper volumes.’

With the RBA meeting the most influential event for the Australian Dollar on Tuesday, the GBP to AUD exchange rate may be subject to some fluctuations.

Furthermore, the UK Halifax House Price figures, Bank of England (BoE) Credit Conditions Survey, Industrial Production and Manufacturing Production figures are also due to be published.

Currently Industrial Production is expected to rise by 2.6% in August on the year, while Manufacturing Production is also forecast to increase by 3.4%.

If Tuesday’s data does see a rise in industrial and manufacturing production, the Pound could recover some lost ground against other majors.

The most influential event for Sterling on Tuesday, however, will be the UK NIESR Gross Domestic Product Estimate for September. For the Pound exchange rate to gain, the UK needs a day of favourable data releases.

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