The AUD GBP exchange rate was 0.25% higher after the release of the release of the latest Australian employment data. The pound sterling has been supported against other currencies due to the expectation for a rate rise, but the Aussie dollar is seeing support from the Sydney reopening, which has come ahead of some expectations.
The AUD to GBP exchange rate was trading at 0.5415 ahead of the weekend.
Australian economy loses quarter of a million jobs
More than a quarter of a million jobs were lost in Australia in the past two months as a result of government lockdowns in New South Wales, Victoria and the ACT.
The latest figures show the number of people in employment in September fell by 138,000.
“The numbers tell us that the pandemic continues to impact the workforce extensively and this impact will continue whilst lockdowns are enforced,” Employment Minister Stuart Robert told reporters on Thursday.
The unemployment rate was slightly higher at 4.6 per cent in September, having eased to a near 13-year low of 4.5 per cent in August, which was largely a result of people halting their search for work.
“The low national unemployment rate continues to reflect reduced participation during the recent lockdowns, rather than strong labour market conditions,” Australian Bureau of Statistics head of labour statistics Bjorn Jarvis said.
The participation rate of those in work or seeking employment fell further in September to 64.5 per cent, from 65.2 per cent.
“This was the third consecutive monthly decline from the near historic high of 66.2 per cent in June 2021 and continued the pattern of large falls in participation during lockdowns,” Mr Jarvis said.
Pound sterling buoyed by ‘72% chance of December hike’
The CME group said there is a 72.4% chance that the Bank of England will raise interest rates in December, according to its BoE Watch tool.
CME, which uses futures prices to guide expectations, said there is a strong chance the bank will raise rates at its policy meeting in December. There is only 27.7% likelihood of no change before the end of the year, with markets seeing zero chance of further easing.
Erik Norland, senior economist at CME Group, said: “Futures markets currently price that the BoE will become the first of the major central banks to raise interest rates following the pandemic with a 21% probability that they move to tighten in November and a 72% chance that they will have moved to higher rates by December.”
Before the Aussie employment figures, Reserve Bank deputy governor Guy Debelle, said the central bank is not seeing any material change in wages or inflation to follow other countries in lifting their interest rates.
“The circumstances here in Australia … both wages and inflation, are quite different from those we are seeing in other countries,” Dr Debelle said on Thursday.
“Yes there are a few pockets of heightened wage pressures but it’s not widespread.”