The British pound is lower against the Australian dollar on Wednesday.
This week Sterling has been unwinding some of the big gains made last week over the Aussie in a sign the month-long downtrend in the exchange rate might be resuming.
Easily the biggest monthly loss in American jobs ever recorded, while expected, was still weighing on sentiment and pulled the pound down as a perceived riskier currency.
GBP/AUD was down by 93 pips (-0.48%) to 1.9230 as of 4pm GMT.
The currency pair topped 1.935 early on but sellers drove it back down to 1.92 and new lows for the week. Yesterday the exchange rate fell -0.15% with a weekly loss of -1.23%.
GBP: US job losses hurt demand risk sentiment
More data showing the devastation the response to the coronavirus has caused to global economies was evident on Wednesday. ADP reported 20.2 million private sector jobs were lost in the United States during April. Investment bank Goldman Sachs estimates that lockdown measures have reduced global GDP by -16%.
With jobs and the economy hit so hard from the lockdown, markets are inclined to reward the currencies of the countries where the measures are being eased the quickest. In the case of the UK, the pound is being punished. The UK has its five tests that need to be met to consider easing the lockdown but Prime Minister Boris Johnson has announced he will outline the next steps this weekend, saying “we will want to get going with some lockdown changes by Monday.”
AUD: China retail sales rebound on May Day
Australia continues to make great strides in its move out of lockdown, though there was some disappointment that an exclusive travel area between only Australia and New Zealand is still some way off.
Economic data from China was a reason for optimism that Australian export orders may be due a recovery. Chinese retail sales reportedly rebounded 60% over the May Day holiday. Retail sales in Australia for March rose +8.5% but almost exclusively because of pre-lockdown panic buying and a big downturn is expected in April.
