The AUDGBP exchange rate was -0.13% lower on Tuesday despite the latest UK jobs number showing a positive outlook for the employment rate. The country saw jobs beating market expectations with a fall in the unemployment rate. Traders are hoping that the end of furlough may not be as hard as previously expected.
The AUD to GBP rate trades at 0.5500 and this is getting close to the 2021 lows for the pair.
UK unemployment rate lower
The latest employment numbers from the UK have shown increased signs that the jobs market has turned a corner since the start of the year. Despite the recent lockdown, the country’s unemployment rate dropped to 4.8% in the first three months of the year. The data on a weekly basis is showing a stronger drop, with an average of 4.6% in the last six weeks of Q1.
There is still likely to be another sure in the jobless rate when the furlough scheme comes to an end in September, although the peak is still expected to be significantly lower than was feared a few months ago.
The current is different from others with a high percentage of jobs lost being in the hospitality and services sector, which has tended to lead the economy with employment spikes after a downturn. In the last month, online job adverts have returned to pre-virus levels and this is boosting the underlying job situation.
Another issue for the UK has been a struggle to hire workers as many have been displaced by the lockdowns and are not available to return to previous roles. Figures from Adzuna showed strong growth in hiring, with almost 1m jobs listed on their website, which is a gain of 18% for the six week period as jobs return in hotels, restaurants and in the events sector.
Wednesday sees further data for AUD to GBP
Wednesday will see the latest release of Westpac Consumer Confidence numbers with the Aussie consumer being upbeat over the last few months.
This will be followed by UK inflation and that could be a big deal for the pair as the UK continues its reopening path. The US economy has seen a surge in inflation and that could pressure the Bank of England if the UK is seen to have inflation creeping higher. The bank is still far from its target of 2%, with the latest figure expected to come in at 0.8%, but a surprise nearer to 1% could spark debate over further tapering by the Bank of England.
The Aussie dollar has suffered in recent weeks after trade tensions re-emerged between the country and its main trading partner, China.
The AUDGBP pair saw lows for the year at 0.5477 on the 1st of April and is now trying to defend the 0.5500 level. That will determine where the pair goes next and the data out over the next two days should be the fuel that drives the Aussie versus pound to a more defined trend.