GBP/AUD Exchange Rate Rangebound amidst Localised Coronavirus Spikes
The Pound to Australian Dollar (GBP/AUD) exchange rate is stuck in a narrow range this morning as the introduction of local lockdowns in both the UK and Australia spooked markets.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.7938, virtually unchanged from this morning’s opening rate.
Pound (GBP) Muted as Leicester Goes Back into Lockdown
The Pound (GBP) is stuck trading in a narrow range against the Australian Dollar (AUD) and majority of its other peers this morning as a worrying rise of coronavirus cases has seen Leicester city re-enter lockdown.
While the rest of the country is preparing to reopen more of the economy, in Leicester all non-essential shops have been closed, and pupils will be sent home from school on Thursday after the city reported a recent spike in cases.
In fact, according to health secretary Matt Hancock, the city has accounted for ‘10% of all positive cases in the country over the past week’.
Most worrying for GBP investors however is fears that other parts of the country could also be forced back into lockdown as the re-opening of pubs and restaurants from Saturday threatens to expose more to the virus.
Australian Dollar (AUD) Subdued on Second Wave Fears
At the same time, the Australian Dollar (AUD) is struggling to find momentum this morning as the appeal of the risk-sensitive currency is undermined by souring market sentiment.
This deterioration is tied to a worrying rise in global coronavirus cases over the past couple of weeks, which are stoking fears of a second wave of infections.
Further limiting demand for the ‘Aussie’ is also the news that Australia’s government has re-introduced strict quarantine measures in over 30 suburbs north of Melbourne.
The decision to lockdown over 300,000 people comes after the area reported two weeks of double digit rises in coronavirus cases.
While Australia has fared better than many countries in the battle against Covid-19, the recent rise risks sending the whole country back into lockdown if it cannot be contained.
GBP/AUD Exchange Rate Forecast: Lack of Brexit Progress to Weigh on Sterling
Looking ahead to the second half of this week’s session, its likely we will Brexit return to the spotlight as the latest round of talks come to a close.
This may see the Pound to Australian Dollar (GBP/AUD) exchange rate trend lower as there seems little chance that the first week of ‘intensified’ talks will have led to any kind of breakthrough.
Meanwhile, the focus for AUD investors will be on publication of Australia’s trade figures later tonight.
This could help provide the ‘Aussie’ with a lift as economists forecast exports will have rebounded in May and have helped to propel the country’s trade surplus to over AU$9bn.