Rising Australian Unemployment Rate Dents Demand for Australian Dollar (AUD)
A disappointing jump in Australian unemployment, with the January Unemployment Rate rising from 5.8% to 6.0%, the Australian Dollar (AUD) has slumped this morning. Consequently the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending higher at 2.0017 today.
Earlier…
Pound Sterling (GBP) has been on a weaker footing today as investors were discouraged by a mixed bag of UK employment data.
Mixed UK Employment Data Prompts Fresh Weakness for Pound Sterling (GBP) Today
Investors were not overly encouraged this morning by the latest raft of UK employment data, with the ILO Unemployment Rate holding steady at 5.1% to disappoint hopes of a slight dip. As wage growth also slowed from 2.0% to 1.9% in the three months to December, the odds of the Bank of England (BoE) opting to begin tightening monetary policy in the near future were dented.
Confidence in Pound Sterling (GBP) was further undermined today as progress in Prime Minister David Cameron’s negotiations on EU reforms appears to have hit something of a snag. Several countries, including Poland and the Czech Republic, have announced their rejection of the current proposals, seeming to put a dampener on Cameron’s hopes of securing a June referendum. Consequently ‘Brexit’ uncertainty is likely to continue weighing on the Pound for some time to come.
Australian Dollar (AUD) Trends Higher after Encouraging RBA Meeting Minutes, Westpac Leading Index
Following the release of the Reserve Bank of Australia’s (RBA) February meeting minutes the Australian Dollar (AUD) has been on more bullish form. Pundits were reassured by the less dovish tone of policymakers, who talked down global slowdown concerns and appeared reluctant to cut interest rates. A moderate improvement in the Westpac Leading Index has equally shored up demand for the antipodean currency, as economic conditions seem to remain strong.
The ‘Aussie’ may gain further strength overnight if the latest Australian Unemployment Rate and Employment Change figures prove bullish. As domestic employment has proven a particularly strong fundamental in recent months investors are likely to gain further confidence on the back of a continued improvement.
Latest Slump in Dairy Prices Softened New Zealand Dollar (NZD) Exchange Rate
Although markets had expected to see another dip in prices at yesterday’s GlobalDairyTrade auction, the ‘Kiwi’ (NZD) still saw a marked slump as dairy values fell for their fourth consecutive session. This persistent weakness in the face of shrinking global demand does not bode well for the outlook of the New Zealand economy and could prompt the Reserve Bank of New Zealand (RBNZ) to cut interest rates sooner rather than later.
However, as global stock markets continue to extend their rally today the New Zealand Dollar has been bolstered by increased trader risk appetite. As Fed policymakers have been proving decidedly more dovish on the subject of future interest rate hikes in recent days, the diminished strength of the US Dollar (USD) has equally helped to push the ‘Kiwi’ higher against many of the majors.
Current GBP, AUD, NZD Exchange Rates
At the time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending lower at 2.0060, while the Pound Sterling to New Zealand Dollar (GBP/NZD) pairing was slumped around 2.1685. Meanwhile, the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate was trending narrowly in the region of 1.0813.
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