The Pound Australian Dollar (GBP AUD) exchange rate advanced this morning as investors welcomed an uptick in UK wage growth in October.
Sterling (GBP) Strengthened by Labour Report
The Pound is climbing this morning as the UK’s latest employment data delivered a much needed jump in wage growth.
According to figures released by the Office for National Statistics (ONS) average earnings leapt from a revised 2.3% to 2.5% in October, in line with market expectations and reaching its highest levels in 2017.
While helped close the gap with inflation, which struck a five-year high of 3.1% in November, it still resulted in the eighth consecutive month in which wages have failed to keep up with rising prices.
Meanwhile slightly denting Sterling’s gains on the back of the wage data was the accompanying unemployment figures, with the jobless rate failing to fall from 4.3% to 4.2% as forecast.
In fact today’s data revealed that the number of people in employment actually fell for the second consecutive month in October, with some analysts suggesting that this may be a sign that employment has peaked.
Geraint Johnes, Professor of Economics at Lancaster University Management School, said;
‘The latest labour force statistics provide further evidence that the labour market has peaked and is now starting to turn down.’
Australian Dollar (AUD) Subdued Ahead of Fed Rate Decision
At the same the Australian Dollar is in a holding pattern this morning as markets eschew the riskier ‘Aussie’ as they await the Federal Reserve rate decision later today.
The Fed is overwhelming expected to vote to raise interest rates at today meeting, however it is likely to be the US central bank’s policy outlook for 2018 that prompts movement in global markets today, with the Australian Dollar possibly rising if the Fed strikes a more dovish tone.
GBP AUD Forecast: BoE to Hold Rates in 2018?
Looking ahead the GBP AUD exchange rate may relinquish its gains on Thursday as the Bank of England (BoE) hold its latest policy meeting, with the Pound likely to tumble if the bank remains dovish on the prospect of rate hikes in 2018.
Meanwhile the Australia Dollar may surge in overnight trading as Australia publishes its latest labour report, with economists forecasting that the number of Australian’s entering the workforce will have jumped by 19,200 in November, up from just 3700 the month before.
Current Interbank Exchange Rates
At the time of writing the GBP AUD exchange rate was trending around 1.7665 and the AUD GBP exchange rate was trending around 0.5656.
Comments are closed.