The Pound to Australian Dollar (GBP/AUD) exchange rate trended lower this morning, as the Australian Dollar benefitted from speculation that US President Donald Trump was in good health after news he had caught the coronavirus Covid19. The ‘Aussie’ was able to push the Pound down a little more easily, as news of Brexit talks being extended was not enough to boost market hopes for a deal.
Last Week: UK and US Politics Return to Market Focus
Last week saw the Pound attempt to advance on hopes that there could be a breakthrough in UK-EU Brexit talks. However, there was also speculation that talks were on the brink of collapsing, which kept the Pound’s gains limited and volatile.
Meanwhile, the Australian Dollar benefitted from some limited market return to risk-sentiment. It was limited however, as global markets were shocked by US political news.
At the end of the week, it was reported that US President Donald Trump had contracted Covid19. This threw the US Presidential Election into uncertainty, with only about a month until election day.
Investors were less willing to take risks on trade-correlated currencies like the Australian Dollar as a result.
Three Things to Watch For This Week
- Reserve Bank of Australia (RBA) Policy Decision
The Reserve Bank of Australia (RBA) will hold its October policy decision during tomorrow’s Asian session. If the bank is less dovish than expected, the Australian Dollar could see stronger demand.
- Health of US President Donald Trump
It was only recently confirmed that US President Donald Trump had contracted the coronavirus Covid19. If his case appears to be a mild one, hopes for an uninterrupted election will rise and markets may be more willing to take risks again.
- UK Growth Rate Report
Britain’s latest growth rate stats are due on Friday. Unless there are Brexit surprises, these are most likely to influence the Pound this week.
With Brexit talks extended, the Pound may be less likely to dominate movement this week. The Australian Dollar will be influenced by Reserve Bank of Australia (RBA) and coronavirus news.