Pound to Australian Dollar Exchange Rate Near Weekly Worst Again
Despite a solid recovery attempt in the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate yesterday, the pair quickly slumped again. Unless there is another shift in movement today, the pair is likely to see losses this week.
Since opening this week at the interbank level of 1.8327, surprising resilience in the Australian Dollar (AUD) has left GBP/AUD trending with a downside bias.
GBP/AUD briefly attempted a recovery rebound yesterday. However, GBP/AUD was quickly tumbling even lower again.
At the time of writing on Friday morning, GBP/AUD trends near a low of 1.81. If the pair closes the week near these lows it means the pair will have lost around half of the previous week’s impressive gains.
Pound (GBP) Exchange Rates Fail to Hold Bank of England (BoE) Rebound
Investors briefly piled into the Pound (GBP) yesterday. The currency surged across the board as markets reacted to the bank’s less gloomy than expected UK economic forecast.
The bank said that Britain didn’t perform as badly in Q2 2020 as expected. The bank’s 2020 forecasts were also raised slightly from the forecasts made in May.
However, while this briefly led to a Sterling surge, the movement was short-lived.
Investors quickly sold the Pound again. The bank’s other outlook factors were not quite as optimistic in comparison and came more into focus as markets digested the news.
Not only did the BoE say that challenges would remain for a long time to come, the bank also indicated that negative interest rates were potentially on the table.
Fears that the UK could see negative interest rates only added to the other factors weighing on Sterling. This includes coronavirus and economic concerns, as well as uncertainty over the direction of the Brexit process.
Australian Dollar (AUD) Exchange Rates Jump as RBA Once Again Rules Out Negative Rates
The Reserve Bank of Australia (RBA) issued its quarterly monetary policy statement during today’s Asian session. In the statement, the bank gave more detail on its outlooks for Australia’s economy amid the coronavirus pandemic.
Perhaps most noteworthy was the RBA once again ruling out the possibility of negative interest rates. This news helped bolster Australian Dollar (AUD) demand slightly today.
AUD also found support in today’s better than expected Australian services PMI data. Ai Group’s services data was forecast to improve to 32 but instead jumped to 44.
Investors may have bought the Australian Dollar even higher if not for market risk-aversion weighing on the currency. Markets are still concerned with the pandemic situation in Australia’s State of Victoria.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Investors Await Job Market Reports
With central bank news behind it, the Pound to Australian Dollar (GBP/AUD) exchange rate is more likely to react to key data again next week.
A slew of both UK and Australian ecostats is due for publication throughout the week. Both the Pound (GBP) and Australian Dollar (AUD) are likely to react to developments in how these economies are handling the coronavirus pandemic.
Perhaps the biggest focus of the week will be the latest job market reports. Both the Bank of England (BoE) and Reserve Bank of Australia (RBA) have indicated that jobs are among the biggest concerns of the coronavirus pandemic.
Britain’s latest job stats will be published on Tuesday, followed by Australia’s own employment stats on Thursday.
Other key stats next week, including UK growth, will also be closely watched by investors.
Of course, major or surprising developments in the coronavirus pandemic will remain the biggest focus overall for the Pound to Australian Dollar (GBP/AUD) exchange rate.