GBP/AUD Exchange Rate Rises Despite Dovish BoE Comments
The Pound Australian Dollar (GBP/AUD) exchange rate rose by 0.2% today despite dovish comments from the Bank of England’s (BoE) Governor, Andrew Bailey, who said the UK’s economic recovery is slowing down. The pairing is currently trading around AU$1.86.
The BoE Governor said that there was now evidence that the UK economic recovery was now ‘levelling off’, adding:
‘But it’s still within the context of this imbalance in demand for goods and services. At the moment we’re seeing some levelling off of the recovery, the short-term indicators are suggesting that.’
Covid-19 disruption as well as issues around global supply chains – and staff shortages – have stymied the UK’s economic recovery.
Nevertheless, following the Health Secretary Sajid Javid’s denial that the UK would face a ‘firebreak’ lockdown next month, demand for Sterling has risen.
Pound investors continue to monitor the UK’s Covid-19 situation despite the Government’s reassurances of not having any plans to impose a lockdown next month.
With daily infections and hospitalisations rising, however, Pound investors are becoming notably more cautious.
Australian Dollar (AUD) Exchange Rate Sinks Despite Hopes for Australian Economy
The Australian Dollar (AUD) fell against the Pound (GBP) today after the Reserve Bank of Australia (RBA) delayed tapering but has extended its quantitative easing programme by three months.
However, the New South Wales Government has now outlined its plan to reopen its economy to vaccinated people, with plans sketched out for as early as mid-October.
Garteth Hutchens, a business reporter for ABC News, comments:
‘[T]here is a firm hope that the state’s economy will bounce back strongly from these lockdowns when the reopening arrives, along with Victoria and the ACT once they also emerge from lockdown.’
As a result, ‘Aussie’ investors have become more optimistic about the outlook for the Australian economy, despite the nation’s strict zero-Covid policy.
GBP/AUD Exchange Rate Forecast: UK GDP Data in Focus
Pound (GBP) traders will be looking ahead to tomorrow’s release of July’s latest manufacturing and industrial production data.
Any improvement in economic growth would translate to a boost for the Pound to Australian Dollar exchange rate.
Tomorrow will also see the final GDP figure for July. Could an upward revision drive-up Sterling?
Australian Dollar (AUD) investors will continue to monitor Australia’s Covid-19 situation. Any signs of rising infection rates would drag down confidence in the Australian economy and weaken the ‘Aussie’.