The Pound Sterling to Australian Dollar (GBP/AUD) exchange continued to fall sharply as Thursday’s session progressed as the market continued to feel the aftershocks of the surprise interest rate cuts made by the Indian and Swiss national banks.
Rising metal and oil prices as well as mixed economic data out of the USA also lent support to the Australian currency.
Earlier the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate fell by more than 1% on Thursday to trade in the region of 1.85 after jobs data buoyed the ‘Aussie’.
UK uncertainty softens GBP exchange rate
Sterling meanwhile came under pressure from the release of a report, which showed that UK house prices rose at their slowest yearly pace since May 2013 in December. The cause of the fall was blamed on the Bank of England tightening lending rules and prospective homebuyers delaying decision until after the May general election.
According to the Royal Institution of Chartered Surveyors (RICS), its monthly house price balance sank to a reading of +11 from +13 recorded in the preceding month. The report also adds to concerns that the UK economy is experiencing a slowdown.
Also softening the Pound Sterling are concerns over the outcome of the May general election. Traders are uncertain as to who will come out on top and according to some news outlets; economists are jittery as the outcome could lead to a referendum, which could see the UK leave the European Union. Morgan Stanley and Barclays Plc are set to cut their forecasts on the Pound.
Australian Jobs Data Buoys AUD exchange rate
The Australian Dollar surged higher against the Pound and rallied strongly against the US Dollar and other major peers due to the release of a far better than forecast jobs report.
According to the Australian Bureau of Statistics, the number of people in work jumped by 37,400 in the last month of the year, adding to a revised November rise of 45,000. The strong rises make that two-month period the best for new jobs since 2006.
The report also showed that Australia’s unemployment rate ticked down to 6.1% in December from the 6.2% recorded in November. That figure was revised down from a previously estimated rate of 6.3%. Most analysts had expected the unemployment rate to sit at 6.3% last month.
Swiss National Bank Decision Creates Volatility
As the session progresses we can expect volatile trading following the surprise announcement by the Swiss national bank that it has ditched its cap with the Euro.
Following the announcement, most currency pairs experienced mixed movements.
