Australian Dollar slips lower against the British pound, Caxton FX forecasting 1.71 for GBP/AUD ahead

The key driver of the GBP/AUD pair on Wednesday is the raft of data released in the UK.

"UK employment data handily beat market expectations as jobless rolls shrank by nearly twice the forecast helping to boost the pound in early London trade today. UK claimant count saw a decline of -29.2K versus -14.3K forecast but the unemployment rate remained steady at 7.8%," says Boris Schlossberg at BK Asset Management.

Chris Towner, director of FX advisory services at foreign currency specialists HiFX says the outlook for the UK economy (and thus a stronger currency?) is turning a great deal sunnier:

"Despite the unemployment rate sticking at 7.8%, the recent health check of the UK economy continues to reflect a far broader and brighter outlook.

"The claimant count fell by 29.2k, the ninth consecutive month of falls and the claimant count rate now stands at its lowest since February 2009. Overall this shows the labour market strengthening and bodes well for further positive momentum to the economy into the third quarter."

Pound forecasted to push towards 1.71

Richard Driver at Caxton FX says he is forecasting yet higher levels in GBP/AUD:

"Despite the Westpac consumer sentiment rising to 3.5% from a 0.1% decline, the AUD weakened last night on the back of a fall in commodity prices, reports that wage growth has remained at the slowest rate in more than three years, and increased speculation that Fed QE3 tapering will begin next month.

"The AUD is currently at 1.7025 and we expect the GBP to push this higher around the 1.71 level thanks to this morning’s UK labour market report."

New Zealand dollar: Strong retail sales ensure GBP/NZD remains under pressure

It is a different story against the New Zealand dollar though; GBP/NZD is half a percent lower at 1.9310.
"New Zealand core retail sales were released last night and exceeded expectations at 2.3% q/q from 1%q/q growth previously, increasing the likelihood that the RBNZ may increase their interest rates next year. This pushed the NZD higher against all 16 of its major currency peers," says Driver.