{"id":3720,"date":"2017-06-14T00:00:00","date_gmt":"2017-06-14T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100104-gbp-aud-uk-wage-data-wait\/"},"modified":"2017-06-14T00:00:00","modified_gmt":"2017-06-14T04:00:00","slug":"100104-gbp-aud-uk-wage-data-wait","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100104-gbp-aud-uk-wage-data-wait\/","title":{"rendered":"Pound May Suffer Over AU$ With UK Wage Data"},"content":{"rendered":"<p>The pound strengthened against the Australian dollar, regaining almost all of the lost ground from Monday\u2019s session. The pound is currently trading at higher at A$1.6910 versus the Aussie dollar, although it is still trading 1.4% lower than levels from before the UK general election.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.72119 AUD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately A$1.72. This specifically measures the pound\u2019s worth against the Australian dollar. If the Aussie dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 AUD = 0.57677 GBP<\/em> <\/p>\n<p> <em>In this example, A$1 is equivalent to approximately \u00a30.58. This measures the Australian dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the Aussie dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>On Tuesday, the pound was able to forget about recent political turmoil following the UK general election. Instead, investors focused on news that Britain\u2019s inflation was at 2.9%, the highest level in four years. Just prior to the Brexit referendum last year, inflation was struggling at 0.3%. Following Brexit, the pound weakened, which meant imports were more expensive which then pushed inflation higher. Following the data release, the pound rallied as hopes increased that the Bank of England (BoE) will consider hiking interest rates in order to keep inflation in Britain under control.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Although, it\u2019s worth remembering that the BoE previously said they\u2019re willing to look beyond this spike in inflation &#8211; which they believe is temporary. With the BoE meeting on Thursday, investors will be keen to see if the central bank is still willing to look through inflation which is almost 3%; 1% higher than the bank\u2019s target level of 2%.<\/p>\n<p>With inflation skyrocketing, UK wage data will be of particular interest today. Analysts are expecting average earnings in Britain to have increased 2.4% annually. With inflation at 2.9%, this would mean that wages are actually falling in real terms, which could result in households holding back on their spending. Given the UK economy\u2019s reliance on the consumer, a slowdown in household spending could be detrimental for economic growth. Should the wage growth come in lower than 2.4%, the fragile recovery in the pound could come under heavy pressure.<\/p>\n<h2><a href=\"#australian-dollar-weaker-as-two-confidence-scores-miss-forecasts\" name=\"australian-dollar-weaker-as-two-confidence-scores-miss-forecasts\"><\/a>Australian dollar weaker as two confidence scores miss forecasts<\/h2>\n<p>Meanwhile, demand for the Aussie dollar was weakening after two key confidence scores came in lower than analysts were expecting. Both the business confidence index and today\u2019s consumer confidence index disappointed. When confidence in an economy drops, businesses are less likely to invest and individuals are less likely to spend \u2014 both bad news for economic growth. A weaker economy will mean a weaker currency, which is what is happening with the Australian dollar now.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The pound strengthened against the Australian dollar, regaining almost all of the lost ground from Monday\u2019s session. The pound is currently trading at higher at A$1.6910 versus the Aussie dollar, although it is still trading 1.4% lower than levels from before the UK general election. What do these figures mean? When measuring the value of [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3721,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379],"tags":[1394],"class_list":{"0":"post-3720","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"tag-gbp"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pound May Suffer Over AU$ With UK Wage Data - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100104-gbp-aud-uk-wage-data-wait\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound May Suffer Over AU$ With UK Wage Data\",\"datePublished\":\"2017-06-14T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/\"},\"wordCount\":824,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100104-gbp-aud-uk-wage-data-wait.jpg\",\"keywords\":[\"gbp\"],\"articleSection\":[\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100104-gbp-aud-uk-wage-data-wait\\\/\",\"name\":\"Pound May Suffer Over AU$ With UK Wage Data - 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