The GBP AUD exchange rate was 0.40% higher on Monday, with traders awaiting economic data release. Meeting minutes from the latest RBA policy meeting will lead the Australian trading session before we get unemployment numbers from the UK. Analysts expect growth in workers but a tick higher in unemployment.
The GBP to AUD rate trades at 1.7530 ahead of the latest economic figures.
Government casts gloom on Australian economic update
Australia’s July economic update later in the month will be “confronting” for Aussies due to lower economic growth and higher inflation, Treasurer Jim Chalmers said. Mr Chalmers expects the update to be delivered on Thursday, 28 July, adding that the country’s economy is in a “difficult if not dangerous place”.
Chalmers added that the new government inherited the most challenging of economic conditions “in living memory”. With over $1tn of public debt and growing inflation, the country’s employment levels remained a bright spot. A report released Monday by a prominent think tank said that supply-side problems fuelled inflation rather than wages.
Reserve Bank of Australia minutes released on Tuesday could give traders an insight into the following path for interest rates. The bank increased the base rate from 0.1% to 1.35%, positioned to move higher with a squeeze on the country’s housing bubble.
UK jobs numbers will dictate the exchange rate
Once the RBA minutes have been absorbed, the latest UK employment figures will further set the tone for the pound sterling versus the Australian dollar.
Analysts expect to see 170k jobs added after last month’s 177k, but this will likely not improve the unemployment rate with a move of 0.1% higher in the unemployment rate.
Welcome news from retail giant Amazon on Monday also said the company would add 4,000 jobs in Britain. That will bump up the company’s UK staff levels to 75,000.
The company created 25,000 UK jobs in 2021 as the Covid pandemic boosted a shift towards online shopping. The company created 40,000 new jobs in the UK over the past three years, enabling it to become one of the biggest UK’s job creators.
Meanwhile, Tom Tugendhat was eliminated from the leadership race on Monday. The winning candidate will determine the path of the pound versus the Aussie dollar as Mr Sunak sees a precarious fiscal situation. In contrast, the other candidates want tax cuts to shake up the economy.
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