Pound-Australian Dollar could struggle to hold gains if UK retail sales and PMI data disappoint, although softer Australian business surveys may limit AUD support.
The Pound to Australian Dollar (GBP/AUD) exchange rate appreciated on Thursday in response to a weaker-than-expected Australian jobs report.
At the time of writing, GBP/AUD was trading at AU$1.9134. Up around 0.2% from the start of Thursday’s opening levels.
DAILY RECAP:
The Australian Dollar (AUD) fell through Thursday’s Asian trading session after Australia’s latest employment figures pointed to a sharper-than-expected cooling in the labour market.
Australia’s labour market unexpectedly shed 15,800 jobs in July, contrasting with forecasts for an increase of around 15,000. The deterioration was accompanied by a rise in the unemployment rate to 4.5%, up from 4.4% in June and its highest level since late 2021.
The unexpectedly soft data prompted some AUD investors to adjust their expectations for further monetary tightening from the Reserve Bank of Australia (RBA), with another rate hike later in the year now seen more as a lineball call.
While able to edge higher against the Australian Dollar, the Pound (GBP) traded sideways against most of its other peers on Thursday, with GBP investors taking a breather following recent high-tier data.
There’s been a mixed response to this week’s data so far, with the UK’s latest inflation and employment figures failing to shift expectations for a potential interest rate hike from the Bank of England’s (BoE) later in the year.
Near-Term GBP/AUD Forecast: Weak Retail Sales and PMI Data to Sap Sterling?
Looking ahead, the Pound Australian Dollar exchange rate may come under pressure on Friday, with the final UK economic releases of the week.
Up first is the UK’s latest retail sales data, which is expected to report a contraction in consumer spending in July.
This will be followed by August’s preliminary PMIs, which could further undermine Sterling if they point to a slowdown in UK private sector activity this month.
In the meantime, Australia’s own PMIs could pile more pressure on the ‘Aussie’ as economists forecast a moderation in Australia’s private sector this month.
Our currency coverage draws on live market data, official economic releases and published bank research.
