GBP/AUD Exchange Rate Falls as Australian Investors Await RBA Speech
The Pound to Australian Dollar (GBP/AUD) exchange rate rose by 0.2% today, with the pairing currently trading around AU$1.825.
The Australian Dollar (AUD) suffered today following the release of Australia’s unemployment rate figure for July, which edged higher from 7.4% to 7.5%.
As a result, ‘Aussie’ investors have become increasingly concerned that joblessness could increase in the months ahead.
ABS spokesman Bjorn Jarvis commented on the data:
‘For the first time there were more than one million people out of work, available to work and actively looking for work. The number of unemployed people rose by nearly 16,000 between June and July.’
In other Australian economic news, today saw the release of the Australian consumer inflation expectations for August, which fell below forecasts but rose from the previous month’s 3.2% to 3.3%.
Australian Dollar (AUD) investors will also be awaiting this evening’s speech from the Reserve Bank of Australia’s (RBA) Governor, Philip Lowe.
Any dovishness about the economy’s ability to recover from the Covid-19 crisis, however, would prove AUD-negative.
Pound (GBP) Sinks as Concerns Grow Over the UK’s Economic Recovery
The Pound (GBP) has continued to struggle today following yesterday’s UK GDP report for the second quarter. This revealed that Britain had plunged into its deepest recession since records began.
Shadow Chancellor Anneliese Dodds commented:
‘The prime minister will say there’s only so much he could do during a global pandemic but that doesn’t explain why our economy is tanking so badly compared to other countries.’
Yesterday also saw the release of the RICS housing price balance for June, which rose from -13% to 12%.
However, the Office for Budget Responsibility (OBR) has predicted dark days ahead for income growth and house prices over the next for years. Consequently, GBP investors are becoming concerned that this could severely restrict recovery in the housing sector in the months ahead.
Lindsay Judge, principal research and policy analyst at the Resolution Foundation, explains:
‘The coronavirus crisis has had a big impact on the education, career prospects and incomes of young people – and unfortunately there’s no silver lining for this group when it comes to house prices.’
GBP/AUD Outlook: Could Improving Australian Home Sales Buoy the ‘Aussie’ Next Week?
Australian Dollar (AUD) investors will be looking ahead to Sunday’s release of the Australian HIA new homes sales figure for July. Any improvement would prove AUD-positive.
Tuesday next week will also see the release of the RBA’s meeting minutes. We could see the ‘Aussie’ shed some of its gains on a dovish message from Australia’s central bank.
The GBP/AUD exchange rate will continue to be driven by economic factors this week. Any indications that the economic outlook for Britain could deteriorate would prove GBP-negative.
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