The Pound Sterling (GBP) to Australian Dollar (AUD) exchange rate was able to advance on Wednesday after positive jobs data and the minutes of the Bank of England’s last policy meeting briefly distracted traders from Thursday’s Scottish Referendum vote.
Data released by the London based Office for National Statistics showed that unemployment across the UK fell to its lowest level in six years, increasing speculation that the nation’s labour market is set to continue to strengthen.
The overall unemployment rate dropped from the previous figure of 6.4% to 6.2%, beating economist forecasts for a figure of 6.3%. The data showed that the nation’s claimant count fell by 37,200 last month, compared to expectations for a decline of 30,000 people. July’s figure was revised to a drop of 37,400 people from a previously reported decline of 33,600.
Wage growth was also shown to have increased slightly. Excluding bonuses wages grew by 0.7%, matching economist forecasts.
Also released on Wednesday were the minutes for the Bank of England’s latest policy meeting. The report offered no new surprises but did show that policy makers Matin Weale and Ian McCafferty continued to vote in favour of raising interest rates. The MPC was unanimous in keeping the bank’s QE program unchanged.
The Australian Dollar meanwhile came under pressure after the latest Westpac-MI Leading Index dropped to a reading of 98.05, continuing the below trend seen since the second month of 2014.
“Overall, we can conclude that commodity prices have intensified their drag on the growth rate; the slowdown in dwelling approvals has led to a reversal in the effect which that series is having on the index. Consumers are less nervous around the labour market; and the flattening of the yield curve has become a drag on growth,” said Westpac’s chief economist Bill Evans.
Pound Sterling to Australian Dollar Exchange Rate Forecast
Despite the positive data, the GBP/AUD exchange rate is likely to remain choppy throughout the session as the UK data is countered by concerns over the Scottish Referendum. The Scottish people take to the polls on Thursday and with the outcome expected to be close investors are cautious.
A Yes victory will weaken the Pound considerably as uncertainty on over what currency will an independent Scotland use and the overall economic impacts upon the wider UK.
A No victory however is likely to send Sterling higher against its peers as the markets will no doubt breathe a sigh of relief. With the outcome expected to be so close however, the issue is not likely to go away and calls for more devolution from Westminster to Wales and England will likely rise in volume.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.9064 ,
Australian Dollar,,Pound Sterling,0.5562 ,
Australian Dollar,,Euro,0.6990 ,
Australian Dollar,,New Zealand Dollar,1.1084 ,
US Dollar,, Australian Dollar ,1.1029 ,
Pound Sterling,, Australian Dollar ,1.7978 ,
Euro,, Australian Dollar ,1.4304 ,
New Zealand Dollar,, Australian Dollar ,0.9021 ,
[/table]
