Australian Dollar Awaits Jobs Data Whilst Sterling Odds Are Favouring a 2020 Rate Cut from BoE

GBP to AUD Rate: Pound vs Australian Dollar Back Above 2, but Could Chinese Economic Data Support the AUD?

The Australian dollar is awaiting news of jobs data which is set to be released later today. Overall trading has slowed as investors make their way into the holiday season and await further details to emerge from the US-China trade deal. Meanwhile, the UK has attempted to claw back some of the election gains which were lost post-election mainly due to the announcement that a hard Brexit deadline has been set by the UK PM Boris Johnson. But reports from economists suggest that the Bank of England (BoE) has been tipped for an interest rate cut towards the start of 2020.

AUD Awaits Employment Figures as 2020 Rate Cut Looks More Likely

Later today the November employment figures for Australia will be released. Yesterday, the Aussie dollar was trading 0.09% lower at US$0.6844 and remained on track for its second session of losses as the chances of an interest rate cut from the Reserve Bank of Australia (RBA) in 2020 began to raise. The RBA has already lowered its benchmark three times in 2019 to a record figure of 0.75%. Markets are predicting a 50-50 chance that the RBA makes this call in the new year which has left investors uneasy.

Before the full labour market report is released later today, there was a snippet of data announced yesterday. This data highlighted that an index of internet job vacancies declined by 1.3% in trend terms for the month of November. This was its biggest drop in seven months. With the index now placed 10.6% lower than the previous year, the largest annual decline in six years has been observed. The RBA governor, Philip Lowe has stated that the economy will need the national jobless rate to fall to or below the figure of 4.5% from its current 5.3% in order to generate wage or inflation pressures.

GBP Recoups Lost Post-Election Gains but Could Risk Losing Them Once More

The GBP rose after the Tories won a majority in the election last week, but these gains turned to losses as the PM announced that a ‘no deal’ Brexit could be back on the table with a hard Brexit deadline being set for December 2020. This legal block would negate any further negotiation time for a Brexit deal and if an agreement is not reached by this deadline the UK could leave the EU without a deal. The GBP found support yesterday with the announcement of the inflation rate remaining at 1.5% in November, but economists are tipping the BoE for an interest rate cut in the coming months as we tick over into the new year.

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