The Pound to Australian Dollar exchange rate has seen little major movement since markets opened this morning. UK outlook concerns continue to weigh on Sterling. However, GBP/AUD is currently attempting to climb higher amid fears that a fresh rise in Australia coronavirus infections could lead to a new lockdown in Sydney.
Last Week: Britain’s Gloomy Outlook Dominates Pound
Earlier last week, Britain’s May growth rate was published. The data came in much worse than expected. It indicated that Britain’s economy was not weathering the coronavirus pandemic as hoped.
Sterling spent most of last week tumbling as a result. It was unable to see much improvement in demand as the week’s other UK data was not enough to improve Britain’s gloomy outlook.
On top of this though, the Australian Dollar was able to benefit from lingering market risk-sentiment for most of the week.
As the ‘Aussie’ is often correlated to market risk-sentiment, it has been able to benefit from rising market hopes for a coronavirus vaccine to be developed around the end of the year.
Three Things to Watch For This Week
- Reserve Bank of Australia (RBA) News
Tuesday’s Asian session will see the publication of the Reserve Bank of Australia’s (RBA) latest meeting minutes, as well as a speech from RBA Governor Philip Lowe. If Lowe’s comments indicate any shift in stance regarding the pandemic, the Australian Dollar could be hit.
2. PMI Projections
Due at the end of the week, PMI projections for Australia and the UK will give investors a better idea of how these economies performed in July. Strong data could offset coronavirus jitters and boost currency demand.
3. Brexit Developments
As we head towards the end of July, UK-EU Brexit negotiations are likely to come into focus again. Investors will be concerned that a lack of progress could make a no-deal scenario at the end of 2020 more likely.
With the Pound outlook gloomy, developments in Australia’s coronavirus outlook are likely to drive the Pound to Australian Dollar exchange rate. Any surprising Brexit news is also likely to be influential.