Pound Australian Dollar Exchange Rate to Trade High on Australian Unemployment?
The Pound Australian Dollar (GBP/AUD) exchange rate saw gains overnight as Australia’s employment data revealed a fall of 146,300 as opposed to the 90,000 expected. A lack of data through today’s session may lead to further gains for the Pound (GBP).
At the time of writing, GBP/AUD is trading at A$1.8887, up slightly from today’s opening levels.
Australian Dollar (AUD) Subdued on Poor Employment Data
The Australian Dollar (AUD) is facing headwinds this morning in the wake of disappointing employment figures for the month of August. While Australia’s unemployment rate edged down rather than rising as expected, employment declined by 146,300 compared with market forecasts of a 90K fall.
Part-time employment also took a significant hit, decreasing by 78,200 in July, compared with an 8,100 gain the previous month. According to the Australian Bureau of Statistics, falls in employment during lockdown periods have tended to increase as lockdowns have extended beyond 4 weeks.
Without any further data through today’s session and into tomorrow, the ‘Aussie’ is likely to extend its losses. Covid woes could exacerbate downside pressure, as the state of Victoria reports 514 new cases – the highest daily number in more than a year.
Yesterday, the Australian Medical Association (AMA) Victoria released a statement urging the state government not to ease restrictions until 80% of over-12s had been fully vaccinated. ‘It is imperative to avoid saturating the capacity of Victorian public hospitals,’ the statement read.
Pound (GBP) to Firm Ahead of Retail Data?
The Pound is trading up against the majority of its peers today despite a lack of UK data. Amidst a mixed market mood, GBP finds support on external factors.
The UK is on the brink of scrapping pre-departure Covid tests for travellers looking to go abroad, as families have resisted holidaying due to tight quarantine procedures. If the green and amber country categories are simplified into a single group, as anticipated, it will guarantee quarantine-free travel there, making international travel more accessible to those on a lower budget.
Scientists are also optimistic over the prospect of a lockdown-free winter period. Yesterday’s winter Covid plan, published by government, says vaccines are the ‘Plan A’, with face-coverings, Covid passports and working-from-home orders only implemented if cases peak.
According to the Telegraph’s Science Editor Sarah Knapton, ‘it is possible that the fear of Plan B will be enough to keep the virus at manageable levels without ever needing to impose it.’
Looking ahead, tomorrow’s retail sales are expected to demonstrate growth for the month of August, potentially boosting the Pound Australian Dollar exchange rate. Meanwhile, bullish speculation relating to the Bank of England (BoE)’s meeting next week suggests a rate hike may come sooner rather than later, off the back of UK CPI exceeding the central bank’s target range.