Australian Dollar Looking for Buyers at Key Support Level Versus the Pound

AUD GBP Sinks After Reserve Bank Disappoints

The Australian dollar was slightly higher on the day as it hovered just below the key support level of 0.5000 against the British Pound. The AUD v GBP pair was trading 0.2% higher at the beginning of the European trading session as traders were still hesitant to buy the Aussie despite continued efforts to lockdown the UK over the recent virus spread.

UK Moving Closer to Virus Lockdown

A further spread of the Coronavirus has seen pressure building on Prime Minister Johnson to take further action to limit the spread and citizens have been advised to avoid pubs, theatres and large gatherings, whilst staff are urged to work from home if possible.

Some pubs and restaurants have been choosing to close their venues as the UK moves closer to a larger lockdown and this is becoming a worrying sign for the economy. Many workers are concerned about the loss of wages and the potential length of the measures. In London, Transport for London are looking at a reduction in underground trains and bus services. France has banned all public gatherings and mobilized 100,000 police officers to enforce the restrictions on movement. Despite these measures, the British Pound still has support against the Australian currency, but future developments or data may change the outlook for the pair.

Thursday Sees Key Australian Employment Data

Thursday will see the release of Australian jobs figures for February and this could be a catalyst for the trend in coming weeks. The Reserve Bank of Australia has been vocal about the importance of employment when making their policy decisions and this figure may give some clue about the potential actions at their next interest rate meeting.

A stronger number could see a rally in the Aussie, whilst weakness will suggest tougher action to cut rates and stimulate the economy with some form of monetary easing. The market expects a positive jobs number of 8.5k, which is lower than last month’s 13.5k jobs added.

The pound also sees employment data released today but this will be less market-moving and the numbers are now largely-irrelevant as the country moves closer to shutting down its hospitality sector. The outcome could be bleak with many pubs and clubs forced out of business if the closures extend beyond a number of weeks.

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