The AUD GBP exchange rate was 0.08% higher following the release of Australian employment data late on Wednesday. The latest Aussie data factors in the recent damage from the government lockdowns but the unemployment rate was better-than-expected. There was also a release of UK GDP figures for the last three months with a 0.4% gain for the economy in August.
The AUD to GBP exchange rate was looking for support above 0.5400 following the data.
Aussie dollar reacts to the latest unemployment data
The Australian economy saw the release of the latest employment data from the lockdowns which showed that the economy lost -138k jobs in September. This is on top of a -146.3k loss in the previous month.
One bright spot for the economy was a smaller increase in the unemployment rate than analysts had expected. The key dynamic of the figures was a rise of 27k in full time employment, with the bulk of the losses being in part-time work.
Aussie traders will breathe a sigh of relief that there was no further damage as the lockdown in Sydney and the ACT finally comes to an end.
Ahead of the employment figures, Reserve Bank of Australia 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 told an online conference on Thursday.
“Yes there are a few pockets of heightened wage pressures but it’s not widespread.”
Pound sterling steady after subdued growth figures
The pound sterling was trading flat on Wednesday after the latest GDP growth figures confirmed that the recovery from the pandemic has lost some momentum recently. Activity in July was revised lower in July and the economy is still short of the pre-pandemic levels and the Bank of England’s recent projections. The International Monetary Fund also warned of the inflationary threat in countries such as the UK.
The UK has had its share of other struggles recently with Capital Economics saying, “the recent broadening in shortages and the fuel crisis may mean that growth has come to a near-standstill since August”.
Despite this, traders are maybe being a little harsh on the UK economy as it still outperformed the rest of the developed nations in the previous quarter and others, such as Australia, have their own economic woes to consider.
On the latest GDP numbers, the ONS said: “The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England”.
“However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July.”
The latest figures for July and August means that the economy is still 0.8 percent below the pre-pandemic levels of February 2020, according to the ONS.