Pound to Australian Dollar Exchange Rate Rebounds as Coronavirus Concern Dents ‘Aussie’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate slipped yesterday, but has already rebounded today. Since this morning’s Reserve Bank of Australia (RBA) policy decision, the Australian Dollar (AUD) has been weaker
Last week saw highly mixed movement in GBP/AUD. GBP/AUD opened the week at the interbank level of 1.79 and briefly tumbled to a 2020 low of 1.78. Despite a late-week rebound attempt, the pair merely ended the week near its opening levels.
GBP/AUD continues to fluctuate within the interbank region of 1.79 this week so far. Following yesterday’s dip, the pair trends closer to the week’s opening levels again during today’s European session.
The Pound’s (GBP) movement has seen little notable shift this week so far. Investors are awaiting upcoming coronavirus and Brexit developments before moving too much on it.
Pound (GBP) Exchange Rates Cautious amid Coronavirus and Brexit Uncertainty
Investors have had little reason to move on the Pound (GBP) thus far this week.
Over the weekend, more of Britain’s economy begun to reopen. More pubs and restaurants started to accept customers again, and Britain’s coronavirus count continues to gradually drop.
With more places reopening though, investors are anxious to see if a ‘second wave’ of infections will occur across Britain. Cases are surging in the US and in the Australian State of Victoria.
As well as caution over global and domestic coronavirus developments, concerns over how Brexit negotiations will unfold this month are also limiting Sterling movement.
UK-EU negotiations remain at an impasse. Analysts predict that if any major progress is made it could happen this month, which means Brexit is looming heavily over Sterling once again.
Australian Dollar (AUD) Exchange Rates Slide after Gloomy RBA Tone
The Australian Dollar (AUD) has been one of the most resilient major currencies in recent months. However, could its strong streak be coming to an end?
As fears of a ‘second wave’ of coronavirus infections grip global headlines, the number of infections in Australia’s State of Victoria is surging.
Australia has been forced to enact more lockdown measures on the state, which is expected to have a big impact on Australia’s chances of economic rebound.
The Reserve Bank of Australia (RBA) also noted this during its July policy decision this morning.
RBA Governor Philip Lowe warned that Australia’s economic recovery was filled with uncertainties as a result of the coronavirus pandemic. He said:
‘Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious, and this is affecting consumption and investment plans,’
The bank’s signals were cautious. In fact, analysts don’t expect any notable moves in Australian interest rates for years now.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Investors Await UK Summer Statement
Tomorrow, UK Chancellor Rishi Sunak will hold a Summer Statement on Britain’s Budget. This supplementary budget comes amid the coronavirus pandemic throwing off the typical budget schedule.
It is not expected to be a series of sweeping announcements, as Britain’s full Budget Statement will be held in the autumn as per usual. Still, markets will be keeping a close eye for potential boosts to infrastructure or fiscal stimulus.
If the plans impress investors they could boost hopes that Britain’s economy will weather the coronavirus pandemic.
Speaking of the pandemic though, markets will also be closely watching Britain’s coronavirus case-count. As more of the economy reopens, ‘second wave’ fears could lead to Sterling (GBP) losses if cases worsen.
As for the Australian Dollar, the currency remains correlated to market risk and trade sentiment as well.
If global recovery hopes improve again, the Pound to Australian Dollar (GBP/AUD) exchange rate is more likely to be pulled towards 2020 lows again.