Continuing this week’s run of economic data, Australia only has the Employment and Unemployment rate data to be released on Thursday. As discussed in the GBP section, increased employment figures historically give rise to a strength in the Australian dollar due to the greater labour workforce.

Australia’s latest unemployment figures for June stood at the highest levels seen since August last year at 5.2%, an unchanged figure from the past 3 months according to Trading Economics.

Economists from Focus Economics expect the figure to remain the same which may likely see the Aussie weaken due to this figure being the highest seen in 12 months and 1.2% higher than its lowest unemployment level at 4% back in 2008.  

Aussie pounded by weakening Renminbi

Aussie pounded by weakening Renminbi

China is Australia’s largest trading partner by quite a considerable measure. Australian exports to China in 2018 totalled $194bn in comparison to its second highest partner Japan at £77bn. It therefore comes as no surprise that as the US China trade war developed, Australia has been indirectly affected.

China has already seen the damaging effects that Trump has caused after he raised tariffs on £300bn worth of Chinese goods. This will mean that the volume of Australian goods and services China can import, something Australia greatly relies on, may be reduced.

Consequently, this has seen the Aussie significantly weaken against all its major currency counterparts besides the failing pound. USD/AUD interbank rates were at 1.477 at the end of last weeks trading session, exchange rates not seen for 3 years and EUR/AUD interbank rates at 1.651, rates also not seen in more than 3 years.

For clients holding Aussie dollars, you may wish to discuss forward contracts with your account manager at FCD should you believe that AUD rates will continue to fall.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.