The Australian dollar has been stronger against the pound, testing interbank levels of 1.9539 this morning, closing in on a six-week high for the Australian currency against the pound. This is the result of renewed optimism in the economic outlook in China, with a feeling that the worst might now be over.
Despite China reporting a -6.8% fall in GDP data last week, the pound to Australian dollar rate has been falling, perhaps in response to signs that the UK is experiencing a bad fallout from the virus by not having prepared sufficiently in advance to contain the virus.
We enter this week with China having cut a key interest rate for lending to help encourage consumer and business activity, there was also a commitment by the government to provide 1 trillion yuan ($141bn USD) in stimulus for infrastructure projects.
Such signals are reflective of the major financial commitments being made globally to combat the negative economic effects of the Coronavirus pandemic, and is supportive of the Australian dollar, which is reliant on a bright global economic outlook, particularly from its major trading partner China.
What Other Events Will Move GBPAUD Rates This Week?
This week sees a key amount of UK economic data including Unemployment, Retail Sales, Inflation and Borrowing data. The data will provide some of the first key pieces of news relating to the February and March periods where economic activity began to be disrupted ahead of the lockdowns.
Sterling had been better supported by the strong stance being taken by the UK government but this enthusiasm has been gently sapped in the last week or two. Signs that other countries are handling the outbreak better than the UK are not inspiring confidence in the UK, with debate beginning on when and for what reasons the lockdown and social distancing measures should end.
Overnight is also the latest RBA Meeting Minutes which might provide further insight into the decision making within the Reserve Bank of Australia. For now the Aussie dollar is stronger against the pound, but any changes in sentiments could also trigger movements on the GBPAUD rate.
If you have a transfer to buy or sell pounds or Australian dollars and wish to better understand future events that might change exchanges rates, please do get in touch directly with me to discuss further.