The Australian dollar was 0.5% lower on the day against the Pound despite better-than-expected Australian employment figures. The AUD v GBP pair was trading at 0.4970 in the European trading session and the 0.5000 level is still a potential support for the market.
Australian Employment Boosts but May Hide Virus Impact
Australian employment figures showed a headline 26.7k jobs added against 6.3k expected, whilst the unemployment rate fell to 5.1%. At this level, the participation rate is the highest in 20 years.
However, the number of Australians who are technically employed but not working enough hours hit a record high of 1.18 million. This number has the country fearing the worst in future figures as the Prime Minister gets set to announce a stimulus package tomorrow, with support for those losing income.
“Today’s labour force figures released by the Australian Bureau of Statistics are sobering, but just the beginning of what Australians are set to face,” Labor’s employment spokesperson said.
Quiet Economic Calendar Will See Current Trends Dominate
With a quiet economic calendar for the rest of the week, it is unlikely that the current trend of Pound strength will change into the weekend. The Australian employment numbers would normally be a boost for the pair, but traders are fixated on future woes for the Aussie currency whilst the UK economy is unlikely to be performing any better. There is still potential now for the Australian dollar to find support at the 0.5000 level, which has been in play over the last week and we may see a small bounce into the weekend.
Next Wednesday will see another interest rate announcement from the Reserve Bank of Australia and they have used the employment numbers as a guide for their policy decision in recent months. Today’s numbers may give them some reason to pause, however the global panic is causing central bankers to take extreme measures for fear of being behind the curve and the Australian economy may be facing zero percent rates in the coming announcement. The UK economy has been seeing the same interest rate levels and the currency outlook will be determined by coming economic data to see which economy fares worse from the virus crisis.
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