The pound lost ground against the Aussie yesterday following the release of unimpressive UK GDP data. The unexpectedly high Australian employment change data also enabled the Australian dollar to rally against the pound. Overall, the GBP/AUD pair declined from a high of 1.8680 to a low of 1.8530 in the past 24 hours.
According to the data published by the Australian Bureau of Statistics, the country’s economy added 53,000 jobs in March, following an addition of 63,600 jobs in the previous month and pleasing economists who were expecting only an addition of 20,800 jobs.
Specifically, full-time employment rose by 72,200 to 9,748,900 people. Similarly, part-time employment fell by 19,200 to 4,135,600 people.
Correspondingly, Australia’s unemployment rate was 3.50% in March, unchanged from February and a notch better than forecasts of 3.60%. The country’s participation rate stood unaltered at 66.70%. While employment rose to 13,884,400, the employment-to-population ratio grew to 64.40%. Also, Australia’s underemployment rate increased to 6.20%. Furthermore, monthly hours worked fell to 1,914 million.
According to the Office for National Statistics, the UK’s economy did not record any change in February, following a 0.40% GDP expansion in the previous month and missing forecasts of 0.1% growth. The decline in the services sector and production was negated by growth in the construction sector. In particular, the services sector recorded a decline of 0.10% in February following a growth of 0.70% in January.
Also, the output of consumer-facing services increased by 0.40% in February, following a rise of 0.30% in January.
In the three months that ended February, the UK’s economy grew by 0.10%.
In a separate news release, the ONS also stated that the UK’s construction output rebounded with a growth of 2.40% m-o-m in February following a decline of 1.70% in the previous month, which pleased economists who were expecting only a 0.90% increase.
While the repair and maintenance sector posted a growth of 4.50% in February, fresh work rose by 1.10% in the same period.
In the three months that ended February, the UK’s construction output posted a growth of 0.90%, reflecting the sixth successive month of growth (three-month on three-month series).
According to the ONS, the UK’s industrial production fell by 0.20% m-o-m in February following a decrease of 0.50% in the previous month and disappointing economists who were expecting a growth of 0.20%.
The decline was led by a 2.20% decline in the electricity and gas sectors. Likewise, supply and sewerage fell by 1.30%. However, the overall decline was partly negated by a 3% rise in mining and quarrying output.
Furthermore, the UK’s manufacturing output remained unchanged in February following a 0.1% decline in the previous month and missing forecasts of 0.20% growth.
The flat GDP growth data is expected to keep the pound slightly bearish against the Aussie in the days ahead.
The historical price chart indicates that the GBP/AUD pair is declining after failing to break the resistance at 1.8680. The next major support is anticipated only near 1.8410. Additionally, the currency pair is not trading below its 50-day moving average while the stochastic indicator is in the bearish zone. Therefore, we anticipate the GBP/AUD pair to remain in a downtrend for the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
