Employment change and the Unemployment numbers were released Overnight for Australia. Employment change numbers impressed at 25.7k, and the unemployment rate remained unchanged at 5.0%. Looking to next week inflation data will be released in the early hours of Wednesday morning. Inflation is set to take a tumble to 1.5% from 1.8%. If this materialises, the Reserve Bank of Australia (RBA) will have to think about their monetary policy and a cut in interest rates may come sooner than they were predicting.
|Currency Pair||% Change (Month)||Difference on £200,000|
Over the last 4 weeks the Australian dollar has been making back some of the lost ground we saw since the start of the year. In one month GBP/AUD interbank exchange rates have dropped by 5 ½ cents making AUD$400,000 approximately £6,700 more expensive. The pound has lost momentum against the Australian dollar for a few reasons including the ongoing Brexit saga, Unemployment rate in Australia falling and Markit Services numbers falling in the UK. The US China trade negotiations have also made progress and earlier this week the Chinese Gross Domestic Product (GDP) figure exceeded expectation.
Looking further ahead, Theresa May and Jeremey Corbyn will continue to negotiate the ongoing Brexit deal. Labour want the UK to remain in a customs union however Theresa May at this stage is not prepared to give in to this demand. If the parties can’t come to a compromise and MPs don’t vote in favour of a majority on a path forward, the UK will take part in European elections and the uncertainty I believe could put pressure on the pound. However, Australian inflation figures are released next week. If inflation falls as much as forecasted this is going to put pressure on the RBA and may impact Australian dollar value in the short term.
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