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Currency Update, October 21st, 2022

This week has seen the AUD/USD bounce off 0.6230 more than once which is hopefully a sign of some sort of support for the Aussie which has been hammered in recent weeks, falling over 6% from 0.6686 only one month ago.

Yesterday saw the unemployment figures released from Australia and it remained steady at 3.5%, only 900 jobs were added even though an increase of 25,000 were expected. Several local economists are now predicting that we have hit rock bottom on the jobs front and that the unemployment rates will soon start to rise. More seasonal, causal and part time roles will no doubt come into effect with the Xmas season just around the corner.

The next RBA meeting on November 1st will be a key date, with the potential of more interest rate increases pencilled in, however the statement from the latest minutes from the RBA did say a smaller increase than that agreed at preceding meetings was warranted given that the cash rate had been increased substantially in a short period of time.” so it will become an interesting day and a volatile on for the currency pair.

This morning the AUD/USD exchange rate is back fighting toward 0.63 cents, sitting at 0.6270 at the time of writing.

Over to the UK and the shortest tenure of any Prime Minster was over after only 45 days after her resignation overnight.

The downfall was the controversial plans around economic policies and usually a news event like this would move the markets strongly, however only a small 0.02% move was recorded yesterday in the GBP/AUD exchange rate.

The days following the original news of the economic plans did see the GBP/AUD swing over 6% in 48 hours, dropping from 1.69, to 1.59 within 24 hours, and the recovering all the way to 1.79 within 2 weeks, showing that there is so much concern and uncertainty in the UK right now that the volatility is extremely high.

As a business owner if you're working or dealing in the UK and in GBP, it's something that should really be taking strong note off as a 10-15% swing in 2 weeks cannot be good for your business health.

The GBP/AUD is sitting back just above $1.79 this morning and seems to be fairly steady, however with a couple of key announcements due out this afternoon including retail sales, there is plenty of room for movement.

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