Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Australian Dollar (GBP/AUD) Exchange Rate Holds Ground as Australian Unemployment Grows

November 19, 2020 - Written by Frank Davies

Rising Australian Unemployment Shores up Pound Australian Dollar (GBP/AUD) Exchange Rate



A smaller-than-expected uptick in the Australian unemployment rate was not enough to keep the Pound to Australian Dollar (GBP/AUD) exchange rate from rallying.

While the unemployment rate did not see quite as sharp an increase as forecast it still picked up from 6.9% to 7% in October, pointing towards weakness within the Australian labour market.

This left the Australian Dollar on a generally weaker footing against its rivals, especially as the impact of Wednesday’s Covid-19 vaccine news widely faded.

With confidence in the outlook of the Australian economy fading the GBP/AUD exchange rate was able to hold onto a positive footing, in spite of Pound weakness.

As a positive Covid-19 diagnosis for an EU negotiator led to the pausing of UK-EU trade talks the mood towards the Pound generally soured.

Increasing doubts over the possibility of the two sides reaching a deal in the near future saw GBP exchange rates come under pressure.

GBP/AUD Exchange Rate Looks Vulnerable Ahead of Australian Retail Sales



Support for the Australian Dollar may pick back up on Friday, though, as forecasts point towards a return to positive growth for October’s retail sales data.

As long as retail sales show growth on the month this may help to shore up AUD exchange rates ahead of the weekend.

Evidence of a recovery in consumer spending would bode well for the fourth quarter outlook, limiting the downside pressure facing the Australian Dollar.

On the other hand, if sales growth fails to reverse the -1.1% decline seen in September this may limit the potential for any GBP/AUD exchange rate losses.

Any fresh resurgence in market risk appetite could still offer the Australian Dollar a boost, meanwhile, with investors still weighing up the possibility of the Covid-19 crisis coming to an end sooner rather than later.

Negative Consumer Confidence Forecast to Limit Pound Appeal



Another negative reading from the GfK consumer confidence index could see the Pound falling further out of favour with investors, on the other hand.

A sustained deterioration in sentiment would increase bets that the UK economy faces a fresh slowdown in the final months of the year.

This weakness could be compounded if October’s UK retail sales figures also fail to impress investors.

With forecasts pointing towards sales growth stalling on the month at the start of the fourth quarter this could expose the GBP/AUD exchange rate to loses.

As strong levels of consumer spending have previously helped to limit the softness of the UK economy in previous months anything short of positive growth here would weigh heavily on the Pound.
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

Comments are currrently disabled