GBP/AUD Exchange Rate Flat as UK Gears Up to Reopen Economy
The Pound to Australian Dollar (GBP/AUD) exchange rate is mostly rangebound this morning, following the news that the UK will take a major step in reopening its economy next week.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8254, virtually unchanged from this morning’s opening rate.
Pound (GBP) Stable as UK Shops to Begin Opening Next Week
The Pound (GBP) is finding support this morning as GBP investors well the news that the government will push ahead with plans to reopen non-essential shops from 15 June.
GBP investors had expressed some doubts in recent weeks on whether the government would deem it safe enough to start reopening the economy given coronavirus cases in the UK remain stubbornly high.
However in the government’s coronavirus briefing on Tuesday, business secretary, Alok Sharma confirmed non-essential shop will be able to reopen next week.
WATCH LIVE: #coronavirus press conference (9 June 2020)
Speakers:
🔵 @AlokSharma_RDG, @BEISgovuk Secretary
🔵 Sarah Albon, Chief Executive @H_S_E https://t.co/0MoiVOY77x— UK Prime Minister (@10DowningStreet) June 9, 2020
Sharma said:
‘So I can confirm today that retail outlets which have been required to be closed will be able to open their doors from Monday, 15 June.
‘This is the latest step in the careful restarting of our economy, and will allow high streets up and down the country to spring back to life.’
The news was welcomed by GBP investors, but this only translated into modest gains for the Pound following a report from the Organisation for Economic Co-operation and Development (OECD) in which it warned the UK is likely to suffer the most economic damage from the coronavirus crisis of any country in the developed world.
Australian Dollar (AUD) Buoyed by Risk-On Trade
At the same time, the Australian Dollar (AUD) is holding its ground this morning as the appeal of the high-yield currency is bolstered by rising risk appetite.
This comes amidst broad weakness in the US Dollar (USD) ahead of the Federal Reserve’s latest policy decision as well as growing hopes for a sharp rebound in global growth.
Further lifting the ‘Aussie’ in early trade was also the publication of Australia’s consumer confidence index, which climbed to a four-month high in June.
GBP/AUD Exchange Rate Forecast: Pound to Sink on Abysmal GDP Figures?
Looking ahead to the latter half of the week, the Pound to Australian Dollar (GBP/AUD) exchange rate faces some likely headwinds with the publication of the UK’s latest GDP figures on Friday.
Economists forecast that April’s figures will reveal economic growth in the UK will have slumped around 20% during the first full month of lockdown, offering just a hint to the depths of the recession that the UK now finds itself.
Meanwhile, the Australian Dollar could face some pressure should tensions between Australian and China continue to flare.
Beijing has bristled at Australia’s calls for a full investigation into the outbreak of the coronavirus pandemic, implementing tariffs on barley and banning beef and now even deterring Students and tourists from staying in the country.
Should tensions between Australia and its largest trading partner continue to grow its likely we will see AUD investors grow increasingly nervous.