The Australian dollar has strengthened significantly against the pound in the past seven days, gaining by over 2% since the beginning of last week. In fact, the Aussie has continued to steadily rise against sterling since the beginning of this month as the stark contrast between how the two economies and governments are coping with the Coronavirus pandemic.
Australia Release New Controversial Virus Testing App
Yesterday the Australian government launched a new app across the country which has been designed to help health authorities track the movements of those who may be at risk of being infected with the virus. Over 1 million people downloaded the app on Sunday, and it is thought that this will help control the spread of the virus and therefore get the country running back to normal.
This news came as a survey was released by an Australian newspaper which suggests that Prime Minister Scott Morrison’s approval rating has soared amidst the pandemic due to his response, and the results showed he is currently enjoying the best approval ratings for a leader in Australia since 2008. It is thought that some of the lockdown measures in the country will start to be relaxed in early May after just five new cases of the virus were reported on Sunday. If the economy can start to get back on track as a result then the Australian dollar could continue to rally against sterling.
Sterling Could Gain With PM Johnson Back at Downing Street
There could be some positivity for the pound on the horizon, and there is a chance that the currency will start the week off on a more positive footing today as PM Boris Johnson returns to Downing Street to lead the country’s response to Coronavirus. Having contracted the virus himself earlier this month, Mr Johnson’s return to office could spark a short-term rally for the pound.
Where other governments have been more transparent with the general public in their exit strategies, the UK have remained more tight-lipped on their plans and have come under criticism. There is growing pressure for them to release some insight into what measures will be implemented and a review of the current strategy is due on May 7th. Any news on what an exit strategy may look like, and the effect this could have on kick-starting the economy are likely to cause volatility in sterling exchange rates.
Brexit talks currently on course to fail
A breakdown in Brexit talks has also weighed heavily on the pound at the end of last week and over the weekend, with Boris Johnson being warned by his advisers that talks are currently set to fail. June has been sighted as the timeline for when both sides need to see progress in talks, otherwise the UK have warned they will need to walk away from talks and prepare for a no-deal.
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