The Pound (GBP) to Australian Dollar (AUD) exchange rate rallied to a 1-week high on Thursday after a new poll showed that support for Scotland to remain a part of the UK increased and as the ‘Aussie’ was weighed upon by disappointing inflation data out of China.
A poll published by Survation on Wednesday night showed that there was fading support for Scotland’s bid for independence from the United Kingdom.
The poll eased fears over a breakup of the 300-year old union and saw the Pound rally against all of its most traded peers.
The Australian Dollar initially got off to a strong start on Thursday after data released in the Asian session showed that employment in the country surged in August.
According to the Australian Bureau of Statistics, the nation’s economy created 121,000 new jobs last month, smashing economist forecasts for the creation of 12,000. The preceding months figure was also revised to a decline of 4,100 from the earlier figure of a 300 drop.
The report also showed that Australia’s unemployment rate ticked down to 6.1% in August from the 6.4% recorded in July, better than expectations for a decline to 6.3%. A separate report by Melbourne Institute meanwhile showed that it expects Australia’s inflation rate to rise to 3.5% in August, up from 3.1% in July.
Any gains from the strong report were soon countered however after data out of China, Australia’s biggest trading partner showed that inflation in the world’s second largest economy eased to its lowest level in four months in August and factory gate prices declined to 30-month lows.
According to the Beijing National Bureau of Statistics, the nations Consumer Price Index increased by 2% from the previous year, less than the 2.2% rise forecast by economists. The Producer Price Index dropped by 1.2%, worse than expectations for a figure of 1.1%.
The disappointing data raised concerns that the Chinese government may have to introduce more stimulus measures in a bid to support the economy.
‘Today’s data prove a fact we all know; the economy is still weak. The government has been rolling out measures to stabilize growth. This situation will definitely continue,’ said Wang Tao, head of Chinese economic research at Hong Kong based UBS AG.
Pound Sterling to Australian Dollar Exchange Rate Forecast
The Pound is forecast to remain volatile until the outcome of the September 18 Scottish Independence vote is know. More surveys and polls are due to be released in the run up to voting day and depending on what they say, we can expect the Pound to rise and fall.
Signs that the Yes to independence campaign are winning will weaken the currency whereas if the opposite is shown we can expect the currency to regain ground.
UPDATE
The Pound (GBP) to Australian Dollar (AUD) exchange rate continued its rally higher on Friday as concerns over next week’s Scottish Referendum eased and as the ‘Aussie’ tumbled on expectations that the US Federal Reserve will raise rates sooner than expected.
A new poll published Thursday night showed that the pro-UK campaign was leading in the polls, easing worries over the economic impacts of Scotland leaving the 300-year old union.
The Australian Dollar continued to tumble as investors continued to sell of the currency on expectations that the US Federal Reserve will show signs of getting closer to raising interest rates at next week’s policy meeting.
