The Pound to Australian Dollar (GBP/AUD) exchange rate traded with notable losses on Thursday, striking a new one-month low as Australia’s latest employment figures surprised to the upside.
Pound to Australian Dollar (GBP/AUD): 1.97325 (-0.67%)
Pound to Dollar (GBP/USD): 1.3498 (+0.59%)
Australian Dollar to Dollar (AUD/USD): 0.68405 (+1.27%)
At the time of writing, GBP/AUD was trading at AU$1.9736. Down around 0.6% from the start of Thursday’s European trading session.
Australian Dollar (AUD) Soars on Surprisingly Strong Jobs Data
The Australian Dollar (AUD) raced higher on Thursday as Australia’s latest jobs report smashed expectations.
According to data published by the Australian Bureau of Statistics (ABS), the Australian economy added 65,200 jobs in December, a sharp rebound from a contraction of 28,700 in November, while also easily beating forecasts for a modest increase of 30,000.
This also translated into an unexpected fall in Australia’s unemployment rate, which dropped from 4.3% to 4.1% against forecasts it would rise to 4.4%.
AUD exchange rates surged in response as it triggered a repricing of Reserve Bank of Australia (RBA) interest rate expectations, with some investors betting the impressive jobs data could push the RBA to hike interest rates as early as next month.
Pound (GBP) Undermined by Rise in UK Government Borrowing
The Pound (GBP) was subdued on Thursday, following the publication of the UK government’s latest borrowing figures.
December’s data showed the UK government borrowed £11.5bn to balance the books at the end of last year, a modest rise from November, but beating forecasts it would rise as high as £14bn.
However, Sterling’s losses were tempered as year-on-year borrowing was actually down by over a third.
GBP/AUD Exchange Rate Forecast: Soft PMI Data to Undermine Sterling?
Turning to the end of the week, upcoming UK economic releases will likely act as the main catalysts of movement for the Pound Australian Dollar exchange rate.
First up will be the publication of the UK’s latest retail sales data, where another soft print during the key December sales period could prove worrying for GBP investors.
This will be swiftly followed by the UK’s PMIs. January’s preliminary figures are expected to report a modest uptick in service sector growth, which may not be enough to extend any meaningful support to Sterling.
In the meantime, Australia’s own PMI figures could drag on the ‘Aussie’ through Friday’s Asian trading session if they point to only limited growth in the private sector this month.
