Sterling Climbs Following Wage Growth News, GBP/AUD, GBP/EUR Higher13 December 2017 by FC Exchange
Currency experts FC Exchange explain why the pound to Australian dollar (GBP/AUD) exchange rate is climbing in Wednesday's European session.
The pound climbed against other major currencies on Wednesday including the euro (GBP/EUR) after UK labour market data was released. Real wages jumped from 2.3% to 2.5% in the three months through October on the year. Excluding bonuses, average weekly earnings rose more modestly, from 2.2% to 2.3%. The increase was positive news to investors following inflation readings in Monday’s session which had shown consumer prices had leapt higher to 3.1% in November.
Economist Ben Brettel commented: ‘The pay squeeze continues for now, but with wages growing a little more strongly and inflation set to fall back in the new year, this looks like it’ll come to an end in the next few months.’
The UK’s unemployment rate remained stable at 4.3%. However, the less positive news was that the data shows the number of people in employment has fallen for the second consecutive reading, dropping by -56K – the biggest fall since May 2015.
Meanwhile, investors in the Australian dollar will be looking towards Thursday’s Australian employment change and unemployment rate data. On Tuesday Reserve Bank of Australia (RBA) Governor, Phillip Lowe, gave a speech, but the Australian commodity currency was little moved.
In the Eurozone, industrial production came in at a healthy 3.7% on the year in October, despite forecasts for only 3.3%. The euro might fluctuate on Thursday with the European Central Bank’s (ECB) interest rate decision and follow-up press conference from ECB Chief Mario Draghi.Additionally, Brexit developments are likely to make the headlines this week and create GBP fluctuations.
So far in Wednesday’s European session, the pound to euro (GBP/EUR) exchange rate has hit highs of 1.1379. The pound to Australian dollar (GBP/AUD) exchange rate has reached pinnacles of 1.7674.
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