The Pound recovered a little ground this morning, as the Pound Australian Dollar (GBP/AUD) exchange rate calmed following last week’s losses.
Continued optimism from Bank of England (BoE) Governor Andrew Bailey kept the Pound appealing. Bailey said he was still growing more confident on recovery and also noted that higher interest rates in financial markets were consistent with the improving economic outlook.
Last Week: Recoiling US Dollar Leads to Surging Risk-Rally
Risk and trade-correlated currencies like the Australian Dollar saw a surge in demand last week. It came largely as investors sold the safe haven US Dollar back from an impressive rally.
A tumbling US Dollar, combined with high expectations for a global recovery from the coronavirus pandemic, bolstered risk-sentiment and the Australian Dollar.
The Pound rally also showed signs of slowing last week, after weeks of highly strong performance. This meant GBP/AUD slipped throughout the week.
Three Things to Watch For This Week
- Reserve Bank of Australia (RBA) Meeting Minutes
Tomorrow will see the publication of the Reserve Bank of Australia’s (RBA) latest meeting minutes report. If the report shows a more optimistic RBA, the Australian Dollar is more likely to see strong performance.
- Bank of England (BoE) Policy Decision
The Bank of England’s (BoE) March policy decision could be the biggest event of the week for GBP/AUD. If the bank takes any surprising shifts on the UK outlook, the Pound could see a big shift in movement.
- Key Australian Data
Australia’s key February job market report will be published on Thursday, with February retail sales following on Friday. Strong data could keep optimism about Australia’s economic resilience high, and support AUD.
GBP/AUD Outlook
With Australia’s busy economic calendar and a Bank of England (BoE) policy decision ahead, there’s plenty for GBP/AUD to react to as well as potential developments in the coronavirus pandemic.