- Written by Rob Samson
- Category: Pound to Euro Exchange Rate News Articles
- Published: 18 January 2013
Today's market sentiment is risk-on following some good strong Chinese economic data - this would usually have the makings for some decent Australian dollar gains. A look at the markets shows:
The pound vs Australian dollar rate is 0.06 pct higher at 1.5176.
The euro vs Australian dollar rate is 0.2 pct for the better at 1.2714.
The Australian dollar vs US dollar rate is 0.4 pct down at 1.0505.
Please note these rates are indicative; your bank will add their spread to the final exchange rate offered. We suggest dealing with an independent provider in order to get a lower spread.
Australian dollar unable to make any ground despite Chinese data
"The Aussie dollar hasn’t managed to make too much ground against the USD on the back of the better than expected Chinese data. Investors went long AUD/USD heading in to the data and clearly a bit too long. Trade has been choppy in the pair and it has whipped around in a range between 1.0510 and 1.0552," says Alex Edwards at UKForex.
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Aus Exchange Rates
Poor labour data is catalyst for recent AUD losses
This week saw confirmation that Australian labour market conditions remained soft at the end of 2012.
"The unemployment rate has trended gradually higher over the past two years but at 5.4% it understates the degree of spare capacity in the labour market due to a rise in discouraged jobseekers over that period," say ANZ Bank.
The gradual weakening in labour market conditions had been foreshadowed by sharp falls in the ANZ job ads series, which declined in December for the tenth straight month.
"There was some tentative evidence in the report, however, of a slowing in the rate of deterioration in labour market conditions – for example, the sharp fall in average hours worked over 2012 appears to have abated," says the Australian bank.
Expectations for RBA action
The Aussie will ultimately be driven by expectations for a new cut to the Australian base interest rate.
"We expect the RBA to remain on hold at its meeting in early February but for moderate inflation to provide scope for lower interest rates over the year. The improvement in financial market sentiment and, tentatively, the global backdrop is likely to stay the RBA’s hand," say ANZ Bank.
However, given confirmation of softness in the Australian labour market this week and few signs that interest-rate sensitive parts of the economy are picking up strongly, an unusually low Q4 underlying CPI inflation print next Wednesday would ensure an interesting discussion by the RBA Board.