GBP/AUD Exchange Rate Jumps Following Disappointing Australian Employment Figures
The Pound Australian Dollar (GBP/AUD) exchange rate is trading at a three-week high this morning in the wake of a downbeat Australian jobs report.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.8931, up around 0.7% from its opening rate.
Australian Dollar (AUD) Stumbles amid Rising RBA Rate Cut Speculation
The Australian Dollar (AUD) fell sharply overnight on Wednesday in response to some disappointing domestic employment figures.
According to data published by the Australian Bureau of Statistics (ABS) the unemployment rate climbed from 5.2% to 5.3% in October as the country experienced its first decline in employment since May 2018.
This comes hot on the heels of Australia’s quarterly wage price index, which showed wage growth slowed in the third quarter.
Signs of a slowing labour market will not be welcomed by the Reserve Bank of Australia (RBA) which has repeatedly warned that this will put more pressure on the bank to continue easing its monetary policy.
While another rate cut in December looks unlikely, there will be pressure on the bank to continue its easing in 2020.
Belinda Allen, Senior Economist at the Commonwealth Bank comments:
‘We do not think the RBA will rush and cut the cash rate in December in reaction to one negative print, but it will sustain the easing bias. The debate on unconventional monetary policy will only increase.
The current odds of a December cut are around 25%.
Pound (GBP) Muted Following Surprise Slump in Retail Sales
The Pound (GBP) lacks direction in broader trade this morning as UK retail sales printed below expectations.
The Office for National Statistics (ONS) reports that UK sales growth slumped to -0.1% in October, missing forecasts of a 0.2% expansion.
This slide in sales comes as a blow to the UK economy as robust consumer spending has been a major driver of growth over the past year, helping the UK avoid falling into a recession in the third quarter.
Retailers will hoping that the Christmas period will help to re-energise sales, but markets will be wary of another potential slowdown in 2020.