Last week the AUD showed some late week strength against the GBP through a combination of stronger than expected employment data out of Australia, and weaker than expected industrial and manufacturing data out of the UK.
Locally today we have some business confidence data being released, whilst tomorrow morning will see the release of some housing data. However, it is the Chinese economic data that is probably more likely to sway the AUD tomorrow afternoon rather than the domestic economic results. Chinese Industrial Production and Retail Sales are expected to fall in line with their previous months results at 8.7% and 12.0% respectively for the month of April. We can expect to see some further strength of the Aussie if these figures are bettered.
The Australian Federal Budget will be announced tomorrow evening at 7:30pm AEST. Whilst the release of the budget has not been a significant market mover historically, it is important to note the high economic significance of the event.
Once again this week it appears as though the major market mover for the AUD to GBP currency pairing will be centred around employment figures. This week the UK release their Employment Change and Unemployment Rate Wednesday evening. Economic expectations are that 248 thousand more jobs will be added to the UK economy, resulting in a drop in the unemployment rate from 6.9% to 6.8%. If this comes to fruition it is likely that we will see some Aussie Dollar weakness around this time as a result of quite strong employment data for the UK. Conversely, weaker than expected employment figures may see a continuation of the Aussie Dollar strength against the Pound
Following the employment figures, the Bank of England will have an Inflation Report reading Wednesday evening.