A government report yesterday showed that unemployment in Australia is now at its lowest level in over 10 years as the economy down under continues to struggle. The increase in jobless rate is now at 6% and could get worse as the mining industry is declining as well as a reduction in the US stimulus programme. Chinese demand has slowed recently which has sent Sterling up by over 2% against the Australian Dollar during this week’s trading sessions.
The International Monetary Fund has suggested that the Australian Dollar needs to be 10% lower than its current levels if the economy is to get back on track. The recent strengthening for the AUD was due to the RBA announcing an end to its interest rate cutting cycle last week which saw the Aussie quickly move but as the week has gone on we have seen a return for Sterling strength.
Unemployment in Australia is is now the highest level since 2003 whilst the number of full time employees fell by over 7,000. The Aussie Dollar has moved by 15% against the US Dollar during 2013 and by as much as 30% in 2013.
Analysts at Goldman Sachs have suggested the Aussie Dollar could decline by another 20% over the next 2 years as Chinese and overall global demand will slow.
Next week in the UK inflation figures are released as well as the Bank of England Minutes so we could expect further Sterling gains against the Australian Dollar early next week.
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