Pound Australian Dollar (GBP/AUD) Exchange Rate Buoyed by Underwhelming AU Jobs Report
The Pound Australian Dollar (GBP/AUD) exchange rate is trending higher this morning, as Australia’s lacklustre jobs report takes its toll on the ‘Aussie’.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8901, up roughly 0.3% from this morning’s opening levels.
Australian Dollar (AUD) Slides on Mixed Jobs Report
The Australian Dollar (AUD) is ticking lower against the Pound (GBP) this morning as markets react to Australia’s latest jobs report
According to data published by the Australian Bureau of Statistics (ABS), domestic unemployment unexpectedly fell last month, dropping from 4.6% to 4.5% versus forecasts it would jump to 4.9%.
While the drop in headline unemployment appears to suggest Australia’s labour market is strengthening, analysts were quick to dismiss the figures, warning that they were warped due to people dropping out of the workforce, amidst the lockdowns imposed in in Sydney and Melbourne.
Bjorn Jarvis, head of labour statistics at the ABS
‘The fall in the unemployment rate reflects a large fall in participation during the recent lockdowns, rather than a strengthening in labour market conditions.’
The downtrend in the Australian Dollar is instead being driven by the accompanying employment growth figures, which revealed employment plunged by 146,000 last month against forecasts for a more modest decline of 90,000.
Further undermining AUD exchange rates were predictions from economists that the fall in economic activity in recent months could trigger a 4% drop in GDP in the third quarter.
Pound (GBP) Upside Dented by Political Uncertainty
At the same time, whilst it has appreciated against the Australian Dollar this morning, elsewhere the Pound appears to be struggling to find support.
This appears to be driven by lingering political uncertainty surrounding Boris Johnson’s recent cabinet reshuffle, amidst reports the Prime Minister will continue to rebuild his ministerial team on Thursday.
This is Johnson’s largest reshuffle since becoming PM so it has unsurprisingly caused some trepidation amongst GBP investors, although the fact that Rishi Sunak has retained his position as Chancellor will see trader breathe a sigh of relief, as Sunak is widely seen as a ‘safe pair of hands’.
Pound Australian Dollar Forecast: Upbeat Retail Sales to Buoy Sterling?
Looking ahead to the end of this week’s session, movement in the Pound Australian Dollar exchange rate is likely to be driven by the publication of the UK’s latest retail sales figures.
Economists forecast that August’s figures will report a 0.5% rebound in sales growth, following a 2.5% contraction in July.
This could help to consolidate this week’s gains in the GBP/AUD exchange rate, as signs of strong consumer spending is likely to further bolster hopes that the Bank of England (BoE) could start tightening its monetary policy in the near-term.
In the absence of any notable AUD data releases, the Australian Dollar is likely to take its cues from global risk sentiment, with the ‘Aussie’ potentially stumbling if a cautious mood prevails.