Aus Dollar Takes a Hit vs British Pound as Australian Employment Provides us with a Shocker

The big number out of Australia overnight was that of the change in employment which, as the below figures indicate, clearly disappointed:

The Pound Sterling to Australian Dollar exchange rate is 0.65 pct higher on a daily basis, 1 GBP converts into 1.7073 AUD.
The Australian Dollar to Pound Sterling exchange rate: 1 AUD converts into 0.5857 AUD.

Please Note: The above are spot market quotes; your bank will affix a discretionary spread to the figures when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

Below: GBP Jumps vs the Aus Dollar

Aus Employment Shocker: "This is very rare outside of recessionary periods"

It was revealed that those in work fell by 10 800, analysts had expected the market to employ 10 000 more. A big miss.

"In trend terms, employment growth is now negative at -1.5K per month, largely due to declining full-time employment, with trend part-time employment flat," says Riki Polygenis at ANZ Research.

Polygenis goes on to point out that the current trends are "very rare outside of recessionary periods and is actually weaker than the slightly negative trend employment growth in the GFC period."

ANZ Research do caution however that the decline is still only relatively mild, and not consistent with a sharply deteriorating labour market.

Nevertheless, in year-ended terms, employment growth was just 1.0%, well short of the 1.8% y/y growth in the population aged 15 and over.

The result on the Australian Dollar has been rather dramatic and this could well scupper a nascent recovery for the currency.

In particular, we should watch out for any changes to the views concerning RBA interest rate hikes.