AUD GBP Sinks to the Yearly Lows on UK Employment

AUDGBP Starts the Week Higher After Jobs Slump

The AUD GBP exchange rate was -0.43% lower as the lockdown chaos continues in Australia and the UK continues to see economic benefits from the reopening strategy. Unemployment dropped to 4.7% in the UK, while wage growth and job openings were also at record highs.

The AUD to GBP pair is now trading once again at the yearly lows around the 0.5270 level.

New Zealand locks nation down with one virus case

New Zealand has joined the heavily criticized Australian strategy of Zero Covid with the nation being locked down over one virus case.

Sydney has been “yet again” used as an excuse to put the whole of New Zealand into lockdown, according to Sky News host Paul Murray. The latest move in Australia’s neighbour has delayed any hopes of inter-country travel and an end to the international border closures.

Coronavirus cases are set to “rise substantially” in Sydney in the coming weeks despite the strict lockdown, authorities said on Tuesday, with Melbourne also moving to toughen their restrictions.

The Aussie dollar has been slammed in recent weeks as the closure of its largest cities sees a mounting weekly cost to the economy.

In today’s RBA meeting minutes, the bank said it was prepared to step in and support the economy further if the virus worsens. The problem is that their stimulus has a lag of 3-6 months and the lockdowns are appear likely to continue into October.

UK employment surges into June with wages and job ads at records

The UK’s unemployment rate has dropped to 4.7% in the three months to the end of June from 4.8% previously, according to the ONS.

Jonathan Athow, a statistician at the ONS said: “The world of work continues to rebound robustly from the effects of the pandemic”.

The ONS reported yesterday that the number of people in employment in the country rose by 182k to 28.9 million last month, which is 200k lower than pre- virus.

“Like the wider UK economy, the jobs market appeared to be on fire through the second quarter,” said analysts at ING bank, using “optimism from the vaccine rollout” as one of the reasons.

Chancellor Rishi Sunak was also upbeat in the latest figures, saying:

“Today’s figures show that our plan for jobs is working — saving people’s jobs and getting people back into work,” the Sunak said.

Staff shortages are still an issue with the UK seeing job vacancies increasing to a record high of 953k in May to July, which was 168k higher than before the pandemic. Preliminary payroll data indicates the number exceeded a million “for the first time ever,” according to the ONS.

Britain’s job market also recorded a record 8.8% jump in wage growth and the labour shortages are now showing up in the jobs market with lorry drivers being offered sign-on bonuses. Tesco supermarket is offering a £1,000 signing-on fee for lorry drivers, while Dixons Carphone, is offering a £1,500 retention bonus to its lorry drivers and the same incentive for other new recruits.