The Australian Dollar is weakening versus the Pound on Thursday paring gains from the previous two sessions. The Australian Dollar eked out a positive close on Wednesday, settling +0.02% at 1.8947.
At 09:15 UTC, GBP/AUD is trading +0.14% at 1.8967 as the jobless rate in Australia hit its highest level in 5 years and amid a souring mood in the market.
594,300 Australian Jobs Lost
The Aussie Dollar is trading on the back-foot after data revealed the devastating impact that the coronavirus outbreak is having on the Australian labour market. Employment fell by a seasonally adjusted 594,300 in April. This was worse than the 575,000 decline that analyst had predicted. The unemployment rate jumped from 5.2% to 6.2%, the highest level since 2015. However, this was marginally better than the 8.2% level that analysts had pencilled in.
According to the Australian Bureau of Statistics the indicators show that one in every five persons employed in March either left employment or had their hours reduced. The Australian Treasury expect the unemployment rate to dip further to 10%. The knock-on effect on the broader economy of such dire figures means any economic recovery will be slow.
The broad mood in the market has taken a turn for the worse after Federal Reserve Chairman issued a bleak warning over the outlook to the US and global economy. Riskier assets and currencies, such as the Aussie Dollar are out of favour as investors adopt a risk off strategy.
Pound Under Pressure Amid Growing Fears For Economy
The Pound is trading broadly lower, albeit higher versus the Aussie Dollar, amid growing concerns over the economic impact of the coronavirus outbreak on the UK economy. Data revealed that the economy contracted -2% in the first quarter. However, this only included two weeks of lockdown in March. The worst is yet to come. The Bank of England is forecasting a -30% contraction the second quarter and-14% contraction in the economy this year.
BoE Governor Andrew Bailey attempted to soothe the market by hinting that the central bank stands ready to ease monetary policy further if needed.
There is no more high impacting UK economic data due for release today. Investors will continue monitoring coronavirus statistics.
