GBP/AUD Exchange Rate Muted Despite UK’s Plans to Ease Lockdown
The Pound to Australian Dollar (GBP/AUD) exchange rate is on the back foot this morning despite GBP investors welcoming the news that the UK is preparing to ease its lockdown restrictions.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8617, virtually unchanged from this morning’s opening rate.
Pound (GBP) Subdued in Spite of Easing of UK Lockdown Measures
The Pound (GBP) is struggling to hold its ground against the Australian Dollar (AUD) this morning, in spite of a cheery mood in UK markets as the UK government prepares to ease its lockdown measures.
Speaking during Monday’s coronavirus update Boris Johnson announced that all non-essential retailers will be able to reopen in England from 15 June, with outdoor markets and car showrooms opening even earlier on 1 June.
Prime Minister @BorisJohnson sets out how retail can reopen in June. https://t.co/eVBZXEtDMJ. pic.twitter.com/sgqfEiTCpz
— UK Prime Minister (@10DowningStreet) May 26, 2020
The easing of the UK’s lockdown measures has been welcomed by GBP investors, who hope it will see the economy lurch back into life next month.
However, Sterling’s gains were capped as the PM made it clear that the move is ‘contingent on progress in the fight against coronavirus’ and that retailers would need to adhere to strict new guidelines before they can reopen.
Johnson said:
‘[Retailers will need to] meet the necessary social distancing and hygiene standards. Shops now have the time to implement this guidance before they reopen.
‘I want people to be confident that they can shop safely, provided they follow the social distancing rules for all premises.’
Also limiting the upside in Sterling this morning is a growing row over prime minister’s chief adviser Dominic Cummings’ breaking of lockdown measures, this threatens to overshadow Johnson’s announcement, while experts warn it could undermine the UK’s lockdown message.
Australian Dollar (AUD) Buoyed by Risk-On Mood
Meanwhile, the Australian Dollar (AUD) has found support this morning amidst an upbeat market mood.
Investors appear to be growing increasingly optimistic as more countries ease their lockdown restrictions as they prepare to reopen their economies.
Further buoying the market mood is the news that US-based bio-tech company, Novavax has begun Phase 1 clinical trials for a potential coronavirus vaccine.
However, markets remain wary of tensions over Hong Kong which may spill over into a new trade dispute between the US and China.
GBP/AUD Exchange Rate Forecast: UK Coronavirus Statistics in Focus
Looking ahead, movement in the Pound to Australian Dollar (GBP/AUD) exchange rate is likely to prove highly sensitive to UK coronavirus statistics over the coming week as the reopening of non-essential shops depends on cases continuing to fall.
This could see Sterling face some setbacks if numbers were to rise by any significant number.
Meanwhile, AUD investors are likely to keep a close eye on diplomatic relations between Australia and China after Australian PM Scott Morrison announced earlier this week a new economic plan to help combat China’s recent anti-trade measures.