FX News: Pound Sterling GBP Forecast Improves on UK Jobs Data

Published: Wednesday, 14 October 2015 14:00 BST - Written by Frank Davies

STORY LINK FX News: Pound Sterling GBP Forecast Improves on UK Jobs Data

UK Jobs Data Sends the Pound (GBP) Exchange Rate Higher

This morning’s UK unemployment figures helped send the Pound Sterling higher against the other sixteen most actively traded global currencies. The Pound had been languishing against the other major world tenders during early trading this week following the publication of the latest UK inflation data which revealed that, for only the second time since the 1960s, domestic prices had dropped during the twelve months to September.

GBP to AUD Conversion Rate Recovers Losses on UK Unemployment Drop

The Pound had ended Monday’s session trading in the 2.0700s against the Australian Dollar (currency : AUD); this represented its lowest level against the Aussie since 13th July. However, the GBP AUD exchange rate had recovered to 2.1231 a short time ago thanks to the release of strong UK labour market data. The official statistics revealed that the overall rate of joblessness had slipped to its lowest level for some seven years at 5.4%, provoking a renaissance for the UK unit.

Interpreting the figures in light of the overall UK economy a short time ago, John Hawksworth of leading Chartered Accountants and Business Analysts PwC noted that, ‘we'll probably see some slowdown in overall GDP growth in the third quarter, reflecting more uncertain global conditions, but the health of the jobs market continues to underpin the domestic economic recovery.’

Such an outcome for UK GDP would lead analysts to downgrade their growth forecast for the Pound Sterling into the medium term.

Chinese Inflation Data Weighs on AUD, NZD, CAD Exchange Rates Today

Elsewhere, last night’s Chinese inflation data for September showed a greater than anticipated drop from the previous month. The year-on-year showing of 1.6% was well down on August’s print of 2.0%, suggesting that the People’s Bank of China may have renewed scope to further loosen its monetary policy in the near-term. Any such move from China’s central bank would be likely to send the Pound Sterling lower against the high-yielding Australian Dollar (currency : AUD), New Zealand Dollar (currency : NZD) and Canadian Dollar (currency : CAD).

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