Morning Brief – Australian Unemployment and Exchange Rate Volatility
SGM-FX Mon 24 Aug 2020
Australian Unemployment and Exchange Rate Volatility
Like most countries, since March this year Australia has seen gyrations in the unemployment rate: in April at the then height of lockdown it reached 14%; by July this had fallen to 9%, but with further LockDown measures particularly in Melbourne, the expectation is for that number to increase to 13% by the end of September. The AUD exchange rate is even more pronounced in its movement: back in January 2018 versus USD, AUD stood at AUD 0.81 but in March 2020 albeit briefly it reached 0.57 and now at the time of writing, it is 0.71 with the expectation that it will likely weaken further on the economic outlook. Movements of such magnitude in globally traded currencies such as AUD/USD ie minus 30% and then plus 25% and especially in a short time frame have become unusual in the past few years which makes this even more noteworthy.
Scroll forward 10 years and in 2030 you may be holidaying at the new USD 500 Billion Red Sea mega city being created by the Kingdom of Saudi Arabia which will include sports and leisure facilities and will cover more than 26,500 square kilometres and will be hi tech and green-with lots of wind, hydrogen and solar renewable power. The idea? To wean the Kingdom off their over reliance on carbon. To date there has been some cynicism in the West as to whether this grand scheme is no more than a passing fancy of the Crown Prince; however yesterday that changed: the Energy Ministry committed to funding and also announced that they will make sure the new city comes to fruition. When Saudi economic and political is brought to bear that is more than sufficient for Neom City to happen.
Today 24 August is of course the Madness bass guitarist, Mark “Bedders’ Bedford’s 59th birthday. Now part of respectable punk rock establishment history legend, it is difficult to conceive of the impact that Madness, The Clash and the Sex Pistols in particular, had on the music scene in the pubs and clubs of the early 80’s.
Here is a reminder of that era with Madness’ 1981 It Must be Love:
I never thought I’d miss you
Half as much as I do
And I never thought I’d feel this way
The way I feel
About you
As soon as I wake up
Every night, every day
I know that it’s you I need
To take the blues away
It must be love, love, love
It must be love, love, love
Nothing more, nothing less
Love is the best
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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