The Pound to Australian Dollar exchange rate has lost around 5-cents in the past 24-hours as the Aussie Dollar spiked late during yesterday’s trading session. It looks like a combination of both Sterling weakness and Australian Dollar strength is behind this market movement, and it’s resulted in the pair trading at their lowest level since the 6th of March.
It had previously looked like Sterling would manage to consolidate north of the 2.00 handle, but last nights downward pressure as thrown a spanner in the works for Sterling bulls. UK Prime Minister Boris Johnson last night announced that the UK is now essentially on lockdown, with most businesses now closed which is likely to hit economic output for the UK moving forward. The Australian Dollar has strengthened against a number of major currency pairs as a result of the Reserve Bank of Australia’s recent moves to try and limit the impact of coronavirus. On Tuesday morning (Australian time) the RBA opted to inject A$6.9 billion into the financial system and also outlined plans to purchase A$4 billion worth of government bonds. The bank has also bought a similar amount of government debt already recently.
Aussie Dollar sellers are now in a better position to perform heir transfers and it remains to be seen as to whether this sharp market movement will be reversed.
There could be a busy week in store for GBP exchange rates as there will be a large amount of economic data releases before the week ends. Thursday could perhaps be the busiest day as the Bank of England will be speaking around lunchtime and the BoE has recently chosen to make some significant changes to monetary policy, so any key comments regarding this, and potential future movements could impact Sterling further.
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