The sterling vs Australian dollar interbank exchange rate has weakened, because we’ve learnt that Australia’s labour market unexpectedly outperformed in December.
According to the Australian Bureau of Statistics (ABS) today, Australia’s unemployment rate fell by 0.1% last month, to 5.1%, beating economists’ forecasts for joblessness to remain at 5.2%.
In addition, Australian companies surprisingly created 28,900 new posts in December, far above financial markets’ predictions for 15,000 positions. These encouraging data suggest that Australian businesses continue to hire, in spite of the ongoing bush fires Down Under.
In turn, this could help convince the Reserve Bank of Australia (RBA) to keep interest rates steady at 0.75%, when it next convenes on February 4th, which would traditionally support the AUD.
Sterling Vs Australian dollar might be affected by rising UK business confidence
Looking ahead, the GBP to AUD interbank exchange rate could be influenced, by signs of rising business confidence in the UK.
According to the Confederation of British Industry’s (CBIs) latest Business Confidence survey, optimism rose to +23 in January, easily above December’s -44%.
This is the highest result in almost six years, since early 2014, and partly reflects the fact that last month’s UK general election delivered a decisive result. Reportedly, this has given UK firms confidence in the UK’s economic and political predictability, as well as the Brexit outlook.
In turn, if these upbeat confidence surveys are mirrored in tomorrow’s UK PMIs (Purchasing Managers’ Indices), the first concrete indication of the UK’s economic performance in 2020, this could impact the pound to Australian dollar interbank exchange rate.
Sterling’s value versus the Australian dollar might be affected, both by the Bank of England’s (BoE) interest rate decision on January 30th, and the RBA’s decision early next month.
In particular, the BoE may be swayed depending on whether the UK economy shows signs of accelerating in January 2020, while the RBA could balance today’s optimistic labour market data against the impact of the bush fires.
For more information on AUD exchange rates for an upcoming currency transfer, you can email me, Daniel Johnson, using the form below.