The AUDGBP exchange rate was lower by 0.11% on Monday as the market absorbs the recent UK Budget and the country’s move toward reopening.
AUDGBP is trading at 0.5540 after trading in a tight range since the start of February.
Queensland Announces $200 Vouchers for Locals
Queensland premier Annastacia Palaszczuk has said that the state will hand out AUD$200 travel vouchers to encourage Queensland residents to take their holidays in Cairns and the Great Barrier Reef. The move comes as borders are reopened and the government fears interstate travel.
Palaszczuk has been vocal for months about the need to extend government support for the struggling hospitality and tourism sector. It’s been suggested that the initiative could create extra visitor spend of up to $14m for the Cairns and Great Barrier Reef economy, but this may be a drop in the ocean from the lockdown damage.
Australia still has no evidence of virus cases, but traders are supporting the British pound over the Aussie dollar.
BoE Governor to Update on Economic Outlook
The Bank of England Governor will speak today in a virtual even with the Resolution Foundation and he could provide some fuel for the Aussie v pound rate.
Last week saw the Reserve Bank of Australia holding rates as expected at 0.1% and central banks are in a co-ordinated effort to keep rates lower. The market moving events will be related to any stimulus measures that are mentioned and the BoE Governor Andrew Bailey will have a chance to update markets after the recent Budget. The interest rate market was also the subject of a move higher in yields and the Governor could update on these events.
The Aussie dollar saw a strong move higher in 2020 but the pound has recovered this year as the Brexit risk premium was removed. Traders are also expecting the pound to be boosted by the UK’s exit from lockdown.
The Australian economy has been performing well but the country has been operating close to normal with light lockdowns. The expectation is that the British economy will see a strong bounce from retail and hospitality activity when it opens in the next few months. Australia still seems to be in no hurry for a revival of travel and they have now passed the summer season again which would affect travel oncve more.
The AUDGBP rate has support at the 0.5500 level and the 0.5740 highs of January 6th are looking a distant dream for the Aussie dollar.
The market will also have a chance to position ahead of the weekend in light of the Fed Chair’s comments on bonds. The Aussie dollar could remain under pressure until a large central bank commits to further stimulus action.
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