The Australian Dollar is continuing to climb against both the Pound and pretty much all other major currency pairs at the moment, with GBPAUD almost losing all the gains made in March by this point.
AUD to GBP has climbed 17 out of the last 18 days and after hitting highs of 2.08 earlier this year we have now seen the pair drop back to 1.9200 which is a large movement in a short space of time. As pretty much the entire world battles the coronavirus I think the markets are taking note of the impressive way in which Australia has battled against it, with Australia recording significantly less fatalities than many other major economies which has helped to boost the Aussie Dollars value. At the same time China is beginning to reopen previously locked down cities such as Wuhan and this has also boosted sentiment surrounding the Aussie economy moving forward due to how interconnectedness of the two economies.
In the early hours of tomorrow morning there will be data releases out of Australia that could further impact the AUDGBP pair, and offer the Aussie Dollar a further boost if the data releases are better than expected. The data released will reflect Australian inflation levels and it will be released in the form of the Consumer Price Index. It will cover Australia during the lockdown so falls are expected, but at the same time if the fall hasn’t been as drastic as markets expect we could see the Aussie Dollar climb and I would expect the 1.90 handle to provide some resistance for GBP/AUD if the rate approaches that level.
Data out of the UK is light this week so I’m expecting politics and coronavirus updates to continue to influence the Pounds value. Yesterday UK minister, Michael Gove said that he thinks the UK will agree a deal to leave the EU before the end of the year although at the moment the issue of fisheries is holding back any progress. Brexit has taken a back seat recently although I still expect key updates to hold the potential for GBP price movements.
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