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Pound Australian Dollar (GBP/AUD) Exchange Rate as BoE Says Outlook for UK Jobs Market Remains ‘Pretty Acute’

June 9, 2021 - Written by John Cameron

GBP/AUD Exchange Rate Rangebound, BoE Says UK Housing Market is ‘On Fire’

The Pound Australian Dollar exchange rate held steady this morning following dovish comments from the Bank of England’s (BoE) chief economist, Andy Haldane, who said the British labour market remains highly uncertain. The pairing is currently fluctuating around AU$1.82.

GBP failed to benefit from his more bullish comments, however, such as that the UK housing market was ‘on fire’. Rising inflation is however causing some concern for the central bank.
Haldane commented on the UK jobs sector:

‘We’ve still got more than 3 million workers on furlough across the UK, and that means that uncertainties about the future jobs market remain pretty acute.’

As a result, Pound traders are becoming more concerned about high levels of employment, which could have a negative effect on the nation’s economic recovery in the next few months.

In addition, comments from UK Chancellor Rishi Sunak to the effect that he would accept a four-week delay the 21 June final easing of lockdown measures have proven Pound-negative.

In the absence of any notable UK economic data today, Pound investors will continue to monitor the Government’s stance on the final stage of easing lockdown measures later this month.

Any indications that this could be delayed would see the GBP/AUD exchange rate fall.

Australian Dollar (AUD) Exchange Rate Steady Despite Weak Consumer Confidence in June

The Australian Dollar (AUD) held steady against the Pound despite the latest Australian Westpac consumer confidence gauge for June falling by -5.2%.

Analysts at the InstaForex Company explained the statistic:

‘This two-month decline can be mainly attributed to a combination of a statistical correction following a very strong surge in April to an 11-year high, the bank said – as well as some disappointment around the budget given high expectations leading into the announcement.

‘The latest fall in June is almost certainly due to concerns around the two-week lockdown in Melbourne as the survey was conducted during the first week of the lockdown.’

Authorities in Australia have said, however, that the lockdown in Melbourne would ease from this Friday.

As a result, this has proved AUD-positive as the outlook for the Australian economy continues to improve.

The risk sensitive ‘Aussie’ has also benefited from the latest China factory gate prices data, which rose by 9.0% year-on-year last month.

With China being Australia’s largest trading partner, this has improved Australian market mood as the outlook for the nation’s economy is looking decidedly more positive.

GBP/AUD Exchange Rate Forecast: Could a Delay to the Final Easing of UK Lockdowns Drag Down Sterling?

Australian Dollar (AUD) investors are looking ahead to Thursday’s publication of the latest Australian consumer inflation expectations for June.

Any indication that the outlook for the Australian economy is continuing to improve would be AUD-positive.

Chinese economic data and US-China trade relations will however continue to influence the AUD/GBP exchange rate.

If the outlook for the Chinese economy continues to improve, then this would benefit the ‘Aussie’. However, if tensions between the US and China continue to escalate, then this would drag down the Australian Dollar.

Tomorrow will see another speech from the BoE’s chief economist, Haldane. Could a more dovish outlook or the UK economy further limit the Pound?

Also in focus will be the Government’s stance on the easing of lockdown measures later this month. If it looks like the date might be pushed back, then the Pound would suffer.

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