Sterling vs the Australian Dollar has continued in an upwards direction for the last fortnight gaining 4 cents in just over a week. Earlier this month Australian unemployment hit its best level at 5.8% better than the expcted 6% . This helped to strengthen the Aussie against the Pound but since then we have also seen the release of UK unemployment. The data was the best it has been since 2009 at 6.9% which continues the theme of a resilient UK economic recovery.
With UK house prices on the rise and wage inflation now higher than inflation for the first time in years this will certainly give rise to higher levels of consumer confidence and promote further consumer spending in the high street and in turn this is likely to encourage UK economic growth.
The IMF has previously stated that they predict the UK will have the best economic growth of all the G7 nations and hence the reason for the fightback for Sterling over the last couple of weeks.
Annual inflation in Australia has fallen to 2.9% to 3.2% putting an interest rate cut discussion out there. With the RBA having stated in February that their interest rate cutting cycle has come to and end I think it will have to be put back on the agenda at next month’s meeting to be held next week.
My prediction is that we’ll see further improvements for Sterling vs the Australian Dollar over the next few days.
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