Ahead of the U.K. economic growth figures on Tuesday, we noted that the levels to watch were 1.9200 and 1.9400 in the GBP v AUD exchange rate. The pair now has a low of 1.9211 since then and following a rally yesterday, is now trading at the 1.9400 level.
The support shown this week from buyers will give the Pound a chance to test higher levels if it can sustain the move. There are no significant data releases in the next few days that will change the Pound to Australian dollar forecast over the near-term.
Stable Economic Data Beats Coronavirus Fears
The move higher in Sterling this week was caused by the U.K. growth figures coming in as expected. Although growth stalled for the fourth quarter, there have been positive signs in other areas that the end of election and Brexit uncertainty may see the British economy improve in coming quarters.
On the other side of the world, Australia’s economic outlook is also stable, but fear and uncertainty still loom with the recent bushfire crisis and Chinese Coronavirus risks to the Aussie economy. This dynamic will likely be the driver of the Pound vs Australian dollar exchange until the picture becomes clearer.
Australian Shares to Close the Week Near the All-Time Highs
Australia’s S&P/ASX 200 index rose 0.18% on Friday and looks set to close out the weekend at 7122, just shy of the all-time highs, which reside around the 7150 level. Aussie stocks are taking a lead from the Chinese index, which is up 0.38% on the day but both indices are having a cautious close to the week as traders are reluctant to take on big positions ahead of the weekend. With uncertainty still surrounding the spread of the Coronavirus, markets are still in a wait-and-see mode. China’s Shanghai Composite index of stocks has recovered 8% of the 10% drop it experienced over a week ago but the outlook to the country’s economy may be understated. Productivity started up again in the country on Monday as workers returned from the extended Lunar New Year break, however the real effects to the economy will take time to filter through in the numbers. Australia’s economy has strong links to China, and this gives the British Pound a safe haven edge over the Aussie until the economic outlook changes in either country.
For more information on AUD/GBP exchange rates for an upcoming currency transfer, please contact myself, Lauren Buckner, using the form below.