The GBPAUD interbank exchange rate fell to a low of 1.8991 on the back of Australian dollar strength. Yesterday the Australian consumer price index year on year, came in better than forecast at 2.2% against a forecast 2%. Other data sets released this morning in Australia also came in better than expected including private sector credit for the month of March coming in at 1% against a previous reading of 0.5%.
Yesterday only a couple of days after returning back to work, Prime Minister Boris Johnson and his fiancée Carrie Symonds announced the birth of their son. While this was not market sensitive news, the good news helped lift spirits in the UK.
Brexit Negotiations Back in the Picture
The Foreign Secretary, Dominic Raab yesterday reiterated again that Brexit trade negotiations will continue but preparations will continue for a no deal Brexit at the end of this year if there is not enough progress towards reaching an agreement with the European Union. Any uncertainty on this part could see the pound weaken as the market refocuses on the threat of a no deal Brexit.
Waiting for the UK lockdown to ease
The latest number of Coronavirus deaths in the UK has exceeded 26,000 people, with statistics now including deaths in care homes. Dominic Raab last night said that the lockdown will not be eased until they know that a ‘second peak’ can be avoided. This would prevent more people losing their lives and further damage to the economy. Australia still have a low amount of cases in comparison of just over 6,700 with only 91 deaths. They could be the second country to soon announce they are Coronavirus free, after New Zealand announced a few days ago that they have eliminated the Coronavirus.
The Australian industry group manufacturing index for April is released at 10:30pm UK time. The previous reading was 53.7, and the market will be looking to see whether this is better or worse than the previous reading.
Other data sets released early tomorrow are Australia manufacturing purchasing managers index which is currently forecast at 45.6. Australia housing industry association new homes sales are released at 1am UK time and Australia producer price index at 2:30am UK time. If these data sets are weaker than their previous readings, it could weaken the Australian dollar and in turn lower the GBPAUD forecast.
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