The Pound Australian Dollar exchange rate has advanced strongly today, despite uncertainty remaining about just how Brexit will play out.
GBP AUD Advance Recorded after BoE’s Saunders Forecasts Flat Unemployment
The only actual UK news today has come from Bank of England (BoE) official Michael Saunders, who has predicted that UK unemployment will not soar in 2017, instead remaining close to 4.8%; this goes against forecasts made immediately after the EU Referendum.
Saunders was not overflowing with optimism, however, as he stated that UK wage growth was also likely to remain subdued during the year.
While iron ore prices have risen successively for the fourth day in a row, the Australian Dollar has failed to follow suit, having been held back by fears about the future of Australian trade during Donald Trump’s tenure in the White House.
GBP Predictions: Challenging Post-Referendum Conditions will Test Saunders’ Employment Outlook
For the Pound, a stable jobs market in the UK is a deciding factor when it comes to future stability and demand.
In the wake of Michael Saunders’ predictions about how UK unemployment and wages may perform in 2017, economists will now be keeping a close eye on these two areas as indicators of how Brexit effects are influencing the economy.
Although Saunders’ comments have reassured some, the fact that inflation is forecast to rise significantly in 2017 may put pressure on the economy to such a level that these outlooks prove unmatchable.
Australian Success in Holding TPP Deal Together could Trigger AUD Rally
For Australia, the economic outlook will be effected by the future of the Trans-Pacific Partnership (TPP) agreement.
Although signed officially in early 2016, the deal has since run into trouble in the form of President-Elect Trump.
Having voiced his desire for the US to tear up existing trade deals and forge more advantageous ones during his election campaign, this attitude has put the future of TPP in serious doubt.
Adopting an optimistic tone has been Australian Trade Minister Steven Ciobo, who has stated that;
‘Talk of the TPP being dead is premature. We need to give the Americans time to work through this issue. We will certainly continue to look for trade opportunities. Australia is a trading nation’.
Regardless of Australian enthusiasm, however, it will ultimately be the US which decides whether the deal remains intact, given the sheer size of the country as a global trading entity. If TPP is somehow saved from the fires of the Trump administration, then the Australian Dollar is expected to be boosted on such news.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.63 and the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.61.
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