Currency News

Daily Exchange Rate Forecasts & Currency News

Could Pound Sterling Gains Versus AUD, NZD & ZAR be Erased?

January 21, 2016 - Written by John Cameron

Sterling Gained in Early Trade Yesterday following Lowest Unemployment Rate in a Decade



The Pound Sterling (currency : GBP) enjoyed a fillip during early trading yesterday when the latest set of UK jobs data was published. The official data revealed that the overall level of British unemployment sank to a relatively lowly 5.1% during the three months to the end of November.

The down shift from the previous month’s showing of 5.2% meant that total UK joblessness stood at its lowest level since the Autumn of 2005.

Pound Appreciation Short-Lived after Weak Wage Growth Delayed BoE Rate Hike Bets



However, every cloud has a silver lining and Sterling-holders’ optimism was tempered by data published at the same time which showed that average weekly earnings for domestic workers increased at their slowest pace for almost a year.

Analysts suggest that there is little chance that the Bank of England (BoE) will opt to increase Base Rate while local wage growth remains anaemic. Gains for the Pound against the other sixteen most actively traded global currencies were therefore limited on the day; the one significant move in the markets did see the Sterling euro exchange rate claw its way back above the psychologically significant 1.3000 GBP EUR threshold.

British Pound Rallied versus Commodity Assets after Global Share Markets Tumbled



The main theme in the markets yesterday was the pronounced flight to safety from investors. Share markets across the globe sank on the day, with London’s benchmark FTSE 100 closing down by 3.5% and the eurozone’s bourses following suit. The shift out of risk saw market participants shun the risk-driven Commodity Dollars, sending the Pound Sterling sharply higher against the Australian Dollar (currency : AUD), New Zealand Dollar (currency : NZD) and the South African Rand (currency : ZAR).

Advertisement
The GBP AUD exchange rate spiked to an intraday peak of 2.0752, while GBP NZD and GBP ZAR hit 2.2287 and 24.0014 respectively.

US share markets initially mirrored the movement on the other side of the Atlantic when they opened middle afternoon UK time. However, the latter part of the US trading day saw investors buy back into equities at bargain basement prices. This move saw the Pound give up some of its earlier gains against the High Yielders and analysts forecast that this move could continue into today.

Like this piece? Please share with your friends and colleagues:

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 Pound Canadian Dollar Forecasts Po Forecasts

Comments are currrently disabled