Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Slips as ‘Aussie’ in ‘Beast Mode’
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate slumped this morning, leaving the pairing trading at around AU$1.9201.
The Australian Dollar edged higher today as signs of progress in the reopening of economies boosted the risk-sensitive currency.
Against the safe-haven US Dollar the ‘Aussie’ has jumped more than 17% after tumbling to a 17-year low last month.
Commenting on this, head of research at brokerage, Pepperstone, Chris Weston noted:
‘The Aussie is in beast mode at the moment. Part of that is down to the fact that it is your best way of playing reflation […] it’s kind of a proxy for equity markets.’
Australia has managed to avoid the high number of coronavirus deaths seen in Europe and the United States.
Australian states are starting to relax the current restrictions on movement, as today saw the reopening of Bondi beach to surfers.
Sterling (GBP) Falls as PM Warns Against Lifting Lockdown Too Early
Meanwhile, Sterling suffered losses against AUD after Prime Minister Boris Johnson warned against moving too early to ease restrictions.
GBP received an upswing of support at the start of the week as markets hoped the Prime Minister would announce the easing of lockdown restrictions.
However, Johnson noted that further details on how some restrictions will be lifted will be revealed later in the week.
The Pound edged lower today after data showed British grocery sales rose 5.5% in the four weeks to 19 April.
This was down from March’s record growth of 20.6% as shoppers built up stocks before the lockdown was announced.
According to Kantar, shoppers spent £524 million more on groceries in the four weeks compared to the same period last year.
Pound Australian Dollar Outlook: Will Weak Inflation Weigh on AUD?
Looking ahead to Wednesday, the Australian Dollar (AUD) could suffer some losses against the Pound (GBP) following the release of inflation data.
If data reveals that inflation fell lower than expected between January and March, it could leave the ‘Aussie’ under pressure.
Meanwhile, markets will look to Wednesday’s US Federal Reserve interest rate decision and press conference.
If the Fed are overly dovish about the global economy and recovery of the US economy, it will weigh on risk appetite. This will send traders flocking back to the safety of the US Dollar (USD) and away from riskier currencies, leaving the Pound Australian Dollar (GBP/AUD) exchange rate trading slightly higher.