The Pound Australian Dollar (GBP/AUD) exchange rate has weakened this morning as an upbeat market mood helps to bolster AUD.
At the time of writing the GBP/AUD pairing is trading at around AU$1.7942 as the UK unemployment dips below 5%.
Pound (GBP) Weakens as 813,000 UK Jobs Lost in the Last Year
The Pound has weakened against the Australian Dollar this morning despite a fall in UK unemployment for March.
The Office for National Statistics (ONS) reports that: ‘The UK unemployment rate was estimated at 4.9%, 0.9 percentage points higher than a year earlier but 0.1 percentage points lower than the previous quarter.’
The UK jobless rate has now fallen for the second month in a row, with the ONS reporting that the job market is ‘broadly stable.’
The minister for employment, Mimi Davies, commented on the drop in unemployment saying:
‘Another drop in unemployment, vacancies on the rise, and over half a million people joining payrolls in the last month is welcome news as we continue on our roadmap to recovery with key sectors of our economy reopening.’
‘This is still a challenging time, but right across the country our Plan for Jobs is helping people of all ages to get back on their feet and giving employers the confidence to recruit as we push to build back better.’
Australian Dollar (AUD) Supported by Upbeat Market Mood
The Australian Dollar has found supported against many of its rivals today on the upbeat market mood, though the currencies gains have been limited following the release of the latest Reserve Bank of Australia (RBA) meeting minutes.
The RBA is set on maintaining an accommodative policy until it is able to stabilise inflation which may not happen until 2024.
In its April meeting, the RBA left interest rates unchanged at the record low of 0.1%, to help combat the effects of the coronavirus pandemic.
The housing market in Australia also remains a concern for the RBA as house prices soared in March to their highest level in over 30 years.
The Australian Dollar is however capitalising on the US Dollar’s weakness today which follows a decline in US Treasury Yields.
Pound Australian Dollar Exchange Rate Outlook: UK Inflation in Focus
For Pound investors, the latest inflation data from the UK for March is hoped to give an insight into how the UK’s economy is performing as lockdown restrictions are eased.
UK inflation is forecast to have risen to 0.8%, an increase of 0.4% on the previous month.
For Australian Dollar traders, the latest preliminary retail sales data from Australia could bolster the ‘Aussie’ higher as sales are expected to re-enter growth territory at 0.7%.
The GBP/AUD exchange rate will continue to be driven by the global market mood in the coming days, a futher pullback in US treasury yields would support the Australian Dollar.