The AUDGBP exchange rate is still trading in a familiar range despite the release of recent data updates. The pair was 0.11% lower on Friday morning, but the price of 0.5560 is still stuck near the levels of late-January.
This week saw the Australian Reserve Bank pouring cold water on any hopes for early rate rises.
End of Wage Subsidy and Employment Figures Loom
The Australian dollar won’t see any big-ticket economic data until Thursday, when the market will get a look at the latest Australian employment figures. The latest figures will be the last before the end of Australia’s wage subsidy program, which is the equivalent of the UK’s furlough.
With JobKeeper ending on March 31st, households and businesses will soon have to operate without a government safety net. As A$300 billion in stimulus measures winds down to smaller levels, the economy will have to stand alone despite some strong activity into the end of 2020. The Australian economy did well, but it was operating near normal levels relative to Europe and the US.
Another support for the economy could be in household savings of A$200 billion that households and businesses have saved during the unstable months of lockdown.
The recent subsidy for domestic travel will help to ensure that household savings remain within the country before the economy finally reopens to international travel.
BoE Rate Update Will Also Fall on Thursday
The same day that we see the release of the Australian employment figures, there will also be a Bank of England interest rate announcement. As with all of the major central banks recently, the bank will hold its key interest rate steady, but traders will focus on the comments by policymakers.
The UK situation is still as it was during last month’s rate decision and this will make it unlikely that we’ll see further action. The UK economy was also upgraded by the OECD this week, while today saw an update for the economy in January, which confirmed what we already know. The UK is set to reopen after a successful vaccine rollout and the economy should do well in comparison to Europe.
Today’s GDP update for January saw the economy lower by -1.7% in January and this was better than the -2.5% rate markets had expected. The same picture played out in the economy with all sectors seeing their own struggles, but it was the services sector that was the main drag on the overall figures. Growth is still below the February pre-virus levels, but the Bank of England have said that it will be another year before that would change.
The AUDGBP rate has stabilised after the recent bond selling and awaits some form of catalyst for a trend to develop. Get in touch to discuss these factors in further detail, and to be kept up to date with the latest market movements.