pound-sterling-coins - GBP
  • Pound (GBP) under pressure as unemployment rate ticks higher
  • Boris Johnson’s internal markets bill clears first vote
  • Australian Dollar (AUD) is on the front foot after RBA said the downturn was less severe than feared
  • Australian house data showed -1.8% QoQ decline vs -1% decline forecast

The Pound Australian Dollar (GBP/AUD) exchange rate is trading marginally lower on Tuesday, after solid gains in the previous session. The pair settled +0.35% higher on Monday at 1.7622. At 08:30 UTC, GBP/AUD trades -0.07% at 1.7609.

The Pound is coming under some pressure as investors digest a mixed jobs report. Unemployment ticked higher to 4.1% in the three months to July. This is up slightly from the 3.9% rate in June. Unemployment remains extremely low as the government’s furlough scheme masks the realty of the jobs market. Those who are furloughed don’t appear as unemployed, they sit in a no man’s land. The government’s job retention scheme comes to an end in October.

On the brighter side, jobless claims rose by just 73,700 rather than the 100,000 that analysts had been expecting. Whilst this is still a large number it slightly better than forecast.

The controversial Brexit bill is also weighing on the Pound after Boris Johnson successfully pushed it through its first vote in Parliament. The Internal Markets Bill knowingly violates the Brexit divorce treaty with the EU signed just last year.

Brussels has given Boris Johnson an ultimatum that he must withdraw the bill by the end of the month or face sanctions.

The minutes from the Reserve Bank of Australia’s September meeting showed that the downturn from the coronavirus crisis has not been as bad as initially feared. The minutes also revealed that the central bank sees recovery underway in most of Australia.

That said, the minutes showed that the recovery has been uneven. The central bank’s policy makers also saw wage pressure and price pressures remain subdued.

House data was less upbeat with a -1.8% quarter on quarter decline in the Australian house price index in the April – June period. This was worse than the 1% decline that analysts had been expecting after gains of 1.6% in the first quarter.