GBP/AUD Exchange Rate Edges Higher as UK Markets Await Chancellor Rishi Sunak’s New Plan to Combat Unemployment
The Pound to Australian Dollar (GBP/AUD) exchange rate rose by 0.3% today, with the pairing currently trading around AU$1.806.
Sterling edged higher against the risk-averse ‘Aussie’ today, despite the UK’s uncertain Covid-19 situation and growing concerns over the nation’s economic health.
GBP investors will be paying close attention to UK Chancellor Rishi Sunak’s new plan to fight a surge in unemployment in the months ahead.
Sunak has recently abandoned the autumn budget, favouring instead packages for employment support and business loan schemes.
A UK Treasury source commented:
‘The chancellor has shown he has been creative in the past and we hope that people will trust us to continue in that vein. Giving people reassurance and businesses the help they need to get through this is uppermost in his mind.’
However, if Sunak paints a bleak picture for the British economy going ahead, the Pound will suffer.
In UK economic news, this morning will see the release of the UK CBI Distributive Trades Survey for September.
If this confirms consensus and falls by -10%, then the GBP/AUD exchange rate could begin to sink.
Australian Dollar (AUD) Sinks as Risk-Sentiment Suffers on Global Covid-19 Uncertainty
The Australian Dollar (AUD) has suffered from growing concerns over the global economy as worldwide Covid-19 infections continue to rise.
Appetite for risky-assets has tumbled this week as parts of Europe and the US prepare for stricter measures to curb the spread of the virus.
Meanwhile, ‘Aussie’ investors have become somewhat more positive following news that Australia’s Covid-19 case numbers are dropping.
Victoria’s Premier Daniel Andrews said that the decreasing numbers were a ‘cause for great optimism’.
However, with Australia’s economic outlook still largely uncertain, this failed to buoy the risk-averse ‘Aussie’.
US-China trade relations, which took a turn for the worse this week, have also limited the Australian Dollar.
If tensions between the world’s two largest economies worsen, then the AUD/GBP exchange rate could fall further.
GBP/AUD Outlook: ‘Aussie’ to Remain in the Doldrums on Growing Global Economic Uncertainties
Pound (GBP) traders will be awaiting tomorrow’s quarterly bulletin from the Bank of England (BoE). If this is notably dovish about the British economy – mentioning uncertainties over Brexit and coronavirus, for example – Sterling would suffer.
The Australian Dollar (AUD) will likely remain subdued as risk-sentiment dips on growing global economic uncertainty.
Furthermore, US-China trade tensions look like they are taking a turn for the worse. As a result, the ‘Aussie’ could suffer a setback as the outlook for the Australian economy, which relies heavily on trade with China, dims.
The GBP/AUD exchange rate could continue to head higher this week despite new Covid-19 restrictions across Britain. Sterling will likely edge higher against the risk-averse ‘Aussie’ as investors flock to safe-haven assets.