The highest ever rise in UK jobless claims as well as plans for £30 billion in tariff reductions after Brexit weighed on Sterling.
China escalating its rift with Australia by announcing an 80% tariff on Australian Barley meant the Aussie was under some pressure too.
Pound versus Australian dollar was down by 18 pips (-0.09%) to 1.8670 as of 4pm GMT.
GBP/AUD saw minimal movement with the price clinging onto the 1.87 level. The exchange rate tumbled 0.87% yesterday leaving it down over 1% for the week.
GBP: Record jobless claims hit Sterling
Britain has a long recorded history but nothing comes close to the employment numbers reported today in available historical data. Jobless claims surged by 856,000 in April.
The pound was mostly able to shake off the horrific numbers because the same is happening everywhere and because it is hoped many people will return to their jobs once the lockdown has ended.
Outside of the jobless data, the UK announced a planned £30 billion in tariff cuts from January 1, 2021 after the Brexit transition period. UK politicians would clearly prefer to switch the narrative to something more positive after last week’s EU trade negotiations stalemate.
AUD: New China tariffs an ongoing risk
RBA minutes were released but with little new information about a meeting in which no change to policy was made, it was Australia’s spat with China that was a bigger mover of the currency.
China is reacting to Australia leading the calls for an investigation into the origin of the coronavirus with economic force. An 80% tariff on Australian Barley announced on May 10 and was confirmed today.
China is reportedly looking at wine, seafood, oatmeal, fruit and dairy as other target industries for tariffs or other measures including implementing stricter quality checks, anti-dumping probes or encouraging consumer boycotts via state media.
So far the potential escalation in tensions with China has not been reflected in the Australian dollar with GBP/AUD at multi-month lows and AUD/USD near 6-week highs.