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Australian Dollar Pound Exchange Rate Tests Highs after BoE Decision

Pound Sterling Exchange Rates

The Australian Dollar to Pound exchange rate continued this week’s upward trend throughout Thursday’s European session, as the day’s UK data was unable to make the Pound a more appealing buy for investors.

AUD GBP began the week trending at the level of 0.5613 and has gradually climbed since Monday. During Thursday’s European session the pair touched on a December high of 0.5717.

Australian Dollar (AUD) Supported by Strong Australian Job Stats

Markets found the Australian Dollar to be one of the most appealing major currencies during Thursday trade, thanks to a surprisingly strong Australian job market report.

Australia’s November job stats were published during Thursday’s Asian session and beat expectations in many key prints.

For example, the participation rate unexpectedly jumped from 65.2% to 65.5%, but the unemployment rate remained at 5.4% as expected.

This was because the employment change figure came in at an impressively high 61.6k, well above the expected 19.2k. It indicated that many citizens were more easily finding work in November.

Earlier in the week, the Australian Dollar’s gains were largely due to market demand for risky commodity-correlated currencies. The ‘Aussie’ benefitted from US Dollar (USD) weakness as well as stronger prices in iron ore, Australia’s most lucrative commodity.

Pound (GBP) Investors Disappointed by Bank of England (BoE) Tone

Thursday saw a lot of news for Pound investors to digest, but in the end there was nothing surprising enough to notably change the cloudy outlook for the British currency.

Britain’s November retail sales stats were highly impressive and briefly helped the Pound to recover slightly against the Australian Dollar.

The monthly figure was forecast to come in at 0.4%, but instead rose from a revised 0.5% to 1.1%. Similarly, the yearly figure jumped to an impressive 1.6% while the previous figure was revised from -0.3% to 0%.

The data indicated to analysts that Black Friday was becoming an increasingly successful shopping day in Britain, particularly with online retailers.

However, some analysts were concerned that Black Friday would pull the bulk of Christmas shopping into November, which could lead to lower-than-expected retail activity in December.

Thursday’s Bank of England (BoE) policy decision was disappointing for Sterling investors too. The bank left monetary policy frozen as expected, but investors hoping for the bank to take a more hawkish tone were disappointed.

The bank did acknowledge that Brexit progress was being made, but claimed there was still too much uncertainty in Britain’s economic outlook, and that interest rates were still only likely to rise at a gradual pace in the coming years.

Australian Dollar Pound Forecast: Brexit News to Take Focus Again

With the anticipated EU summit taking place from Thursday through Friday, markets are hoping for some kind of Brexit development to be made over the weekend.

Any news on when UK-EU trade negotiations could begin, such as the projected timing for the second phase of Brexit talks, could lead to stronger demand for the Pound.

Amid a lack of key datasets due for publication in the coming days, Brexit news is likely to take focus for Pound traders next week, at least until the 22nd when key UK growth stats will be published.

If there is no notable Brexit news, Sterling could become less appealing which would make it easier for AUD GBP to continue advancing.

Next week’s most notable Australian news will be the Reserve Bank of Australia’s (RBA) latest meeting minutes, as well as Westpac’s November leading index print.

If any new information is found in the RBA minutes report this could influence the Australian Dollar, but failing that the currency is more likely to be influenced by risk-sentiment.

AUD GBP Interbank Rate

At the time of writing this article, the Australian Dollar to Pound exchange rate trended in the region of 0.5710. The Pound to Australian Dollar exchange rate traded at around 1.7505.