The AUDGBP exchange rate is strong on Tuesday with a gain of 0.54% at the start of the UK session, but the latest employment numbers from the UK will determine the path for the day. The Aussie dollar is really just bouncing from a sell-off yesterday, with the pair tumbling below 0.5600 again.
AUD to GBP trades at 0.5573 and the pair is consolidating until it sees further economic data clarity for the pace of the UK reopening.
Reuters poll sees strong Aussie recovery
The Australian economy is expected to capitalise on its virus handling by expanding at the quickest pace since 2007. This was according to a Reuters poll which surveyed 34.
The report highlighted: “In 2020, on average, the UK economy contracted 10%, the eurozone by well over 6%, Japan by 5% and the U.S. by more than 3%.
After contracting at a much slower pace than its peers at around 2.5% last year, Australia’s A$2 trillion economy was forecast to expand on average by 4.4% this year and 3.2% in 2022”.
The Australian economy has been boosted in the last months as record consumer savings and a busy jobs market have aligned with strong house prices to keep consumer confidence at ten-year highs. This will continue to boost the economy as things reopen, however the economy is reliant on mining for its health and that requires continued demand without further global economic shocks.
British job losses expected again
Today sees the release of the latest jobs numbers from the UK and another loss of 150k jobs is expected. The furlough is helping to bridge the gap with the non-essential businesses reopening and a recent boost in hiring seen in the services PMI. This will help to remove some gloom from the data, while the UK unemployment rate is lower than in Australia.
Jobs down under have boomed lately with more in work than before the crisis and the Seek agency seeing the most jobs posted since the company began. This is partly due to roles coming back that were laid off but the signs are still good for the months ahead. The CBA also expected the unemployment rate to drop to 5% in Australia by year-end after a surprise dip to 5.6% this month.
The UK should get a boost in its future jobs numbers, once the reopening hiring levels can be added to the data and the services sector should lead other sectors into hiring. Retail footfall has been strong and punters have been swarming back to outdoor pubs and restaurant which lift consumers and a spell of summer weather down the line may help many forget about holidays for the short-term.
The AUDGBP has given up the 0.5600 level after hopes of a breakout and the pair may consolidate in the 0.55 – 56 range until further clarity is gained on the economic paths of both countries.