AUD GBP Extends Gains Despite UK Employment Gains

AUD GBP Extends Gains Despite UK Employment Gains

The AUD GBP exchange rate was 0.15% higher on Tuesday as investors continue to support the Aussie dollar in light of the reopening of Sydney.  The Aussie shrugged off UK employment gains on Tuesday. Today will see the Australian employment report, but traders will be aware of the lockdown effects on the numbers.

The AUD to GBP exchange rate is trading at 0.5410 ahead of the employment data today.

Aussie dollar reacts to commodities and Sydney reopening

The UK economy saw payrolls higher in September, according to the Office for National Statistics data. Vacancies were also at a new record high of 1.1 million.

The latest figures help to ease fears of damage from the ending of the furlough scheme.

The UK economy added 207,000 extra jobs in the latest report, while the unemployment rate for the three months to August decreased to 4.5 percent.

“The jobs market has continued to recover from the effects of the coronavirus, with the number of employees on payroll in September now well exceeding pre-pandemic levels,” said Daren Morgan, ONS director of statistics.

“Employment may not have fallen at all as the end of the furlough scheme on 30th September came into view,” said economists at Capital Economics.

Chancellor Rishi Sunak called the latest data “encouraging” after saying recently that the governments plan on jobs was working.

However, the numbers did little to clear up the “big puzzle” that Bank of England Governor Andrew Bailey mentioned in September, where high employment and relatively high rates of long-term joblessness exist.

“We are starting to see a vacancy paradox in the jobs market: record-high job adverts but still more people unemployed than there were before the pandemic. The answer appears to be that those people seeking work do not have the skills or availability that employers need,” said Kitty Ussher, chief economist at the Institute of Directors.

ACT to become the latest reopening in Australia

The state of ACT has confirmed it will exit lockdown from this Thursday with licensed venues returning, while it has also loosened the current border bubble with NSW.

New South Wales recorded 360 cases and five deaths as it moved above the 90% first-vaccination dose among the eligible population. Over 75% are now said to be fully-vaccinated as the state announced a reopening after 106 days. The state’s new premier, Dominic Perrottet, also announced further business support as the state emerged from lockdown.

Today will see a big round of economic data with another employment release for the Australian economy. This will highlight some of the damage from the recent lockdowns with analysts expecting another loss of -137.5k jobs. The unemployment rate is expected to move higher to 4.8% from 4.5%. The day will also see Westpac consumer confidence released and traders will likely look beyond the latest figures with the reopening if they come in as expected.

The final data point for the day with be the UK GDP for the three months to August with a dip forecast to 3% from 3.6%.