The GBP/AUD exchange rate fluctuated through last week’s session, as coronavirus developments kept investors on their feet.
What’s Been Happening: Hopes for Coronavirus Vaccine Cheers Markets
The Pound initially stumbled out of the gate last week as GBP investors remained pessimistic at the start of the latest round of Brexit talks.
At the same time, the Australian Dollar struck higher through the first half of the session, propped up by some positive PMI figures from China.
But this gave wave to weakness in AUD exchange rates the middle of the week as Prime Minister Scott Morrison stoked tensions with China over his offer to ‘step up and support’ citizens of Hong Kong.
This offered a way for Sterling to recoup some ground in end-of-quarter trade. However, any meaningful gains proved limited as positive US jobs data and positive headlines regarding a possible coronavirus vaccine proved more beneficial to the ‘Aussie’ in the latter half of the week.
Three Things to Watch Out for This Week
1. Rishi Sunak Summer Statement
Likely acting as the main catalyst of movement in the Pound this week will be Rishi Sunak’s ‘summer update’ on the current state of the UK economy and steps the government will be taking to help boost growth in the second half of 2020.
2. RBA Rate Decision
For AUD investors the spotlight will no doubt be on the Reserve Bank of Australia’s (RBA) latest rate decision. No policy changes are expected this week, but will the bank offer any insight into tis future stimulus plans?
3. Coronavirus Developments
Both currencies are also likely to remain highly sensitive to any coronavirus headlines this week, with concerns over a second wave of infections in Australia potentially infusing volatility into the pairing.
Looking ahead, the GBP/AUD exchange rate is likely to continue to trade in a wide range this week, as uncertainty over the coronavirus continues to dominate markets.