Australian Dollar Finds Support in Jobs Data, but 2020 RBA Cuts Look Likely and Could See an Economic Slowdown

Pound to Australian Dollar Exchange Rate Summary: GBPAUD Rises to Two Week Interbank Highs

AUD has had an up-and-down sort of week this week as the market prepares to settle down for the festive period. The currency found support in positive data but also had its fair share of poor performing data which limited gains for the Aussie Dollar.

Positive Data Lifted AUD This Week but Some Bumps in the Road Have Occurred

The week started off on the front foot with news from the previous week surrounding the US-China talks sending out the message that a deal had been struck. This caused the China-sensitive currency to rise. This uplift was stalled later in the week as details from the supposedly ‘done deal’ were not released. This left investors on edge as the details of the deal were left relatively unknown. AUD suffered a further loss of confidence as the RBA meeting revealed that they had once again opened the door for interest rate cuts at the start of 2020, which caused the AUD to fall to a weekly low. The currency also stagnated mid-week as investors were still waiting on details of the US-China trade deal with worry creeping in about the complexity of a ‘phase two’ agreement.

Towards the latter of the week, the AUD finally found some support in the release of the jobs data on Thursday. The figures suggested that the unemployment rate had fallen with the creation of 39.9k jobs in the month of November. This shocked markets as they expected a much smaller increase, this sent AUD rising as worries about RBA concerns eased off a little.

Looking Ahead to Next Week for AUD

For AUD, there appears to be little in the way of upcoming important announcements for the next week. The RBA had their final meeting of 2019 earlier this week which has ruffled a few feathers over the future direction regarding rate cut decisions as the door was left open for a potential cut in early 2020, with Westpac tipping this to be the likely outcome. AUD will likely look overseas for its trading efforts in the upcoming week. Investors will be hoping for more news to unfold in the US-China deal as more details would likely give support to the currency. Furthermore, investors that are trading AUD with GBP will be attentive to the unfolding of the UK governments plan moving forward as they look to tighten up on Brexit post-election, calling for a hard deadline to be set in December 2020 just earlier this week.

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