The British pound is flat against the Australian dollar on Tuesday.

  • UK jobless claims rise by most in a decade
  • Precious metal prices dramatically sink (silver price -11%)
  • New Zealand records first coronavirus case in over 100 days
  • Melbourne spending down 17% during lockdown – ANZ

GBP/AUD was down by 22 pips (-0.11%) to 1.8894 as of 4pm GMT. This week the pound is higher over the Aussie dollar by +0.225.

The currency pair dropped sharply early but found support above 1.82 and rallied back to a new high for the day then pulled back to the flat line. Yesterday the exchange rate gained +0.23%

GBP: Pound drops but recovers after joblessness rises

A 94,400 spike in jobless claims reported by the ONS in July, which was the biggest monthly rise since 2009 saw Sterling weaken early on. The increasing joblessness comes following the surprise drop of 28,100 in June.

Officially the unemployment rate fell to 3.9% from 4.2% in the three months through June but the figures are distorted by the government furlough scheme. Tomorrow the UK releases second quarter GDP data where a catastrophic -20.2% decline is expected across the quarter. The reversal in GDP is exaggerated by the fact the government is paying people to stay at home and not be productive.

AUD: Aussie dollar steady after NZ new local case

The Australian dollar resisted the urge not to sell-off alongside precious metal prices. In past periods the Aussie has had a strong correlation with the price of gold. The correlation broke down as gold set out on a path to record highs this year. Today the price of gold sank over $75 and silver prices dropped double digits in a big profit-taking move following a large run up in the price.

The Australian and New Zealand dollar saw only a temporary reaction to the first local COVID-19 case in New Zealand in 102 days. Investors are not jumping to any conclusions but will be watching in the days to come to see whether Australia sees the same level of second wave that has taken hold in Melbourne.