The Australian dollar has risen back against the pound, dropping back below 2 on the GBPAUD interbank exchange rate. Sterling had been higher in recent weeks following optimism over progress on the economic methods necessary to steer a way through the crisis.
The Aussie is stronger overnight as the RBA (Reserve Bank of Australia) interest rate decision was released and whilst there is no actual change in policy, their confirmation of a ‘wait and see’ approach to interest rates helped to calm markets as it removed some of the more initial fears over future policy actions.
With the RBA having cut interest rates to a record low of 0.25% in March at an emergency meeting, markets remain fearful that monetary policy down under may remain sensitive to changes in the ever volatile global economy, in response to the COVID-19 pandemic.
This rings all the truer to Australia who due to their huge reliance on China as a key trading partner, is very susceptible to changes in the Chinese economic outlook.
What Other Events May Move GBPAUD Exchange Rates?
GBPAUD interbank exchange rates are currently 1.9929, having dropped from their highs of 2.0780 on the 19th March. Other news to shape the levels ahead include the response to the health of Boris Johnson, UK prime Minister, worryingly taken to intensive care last night at the hands of the Coronavirus.
Sterling was down on this news triggered by fears over the lack of leadership ahead for the pandemic for the UK. There was optimism on some markets yesterday, in response to the news that there had been a levelling off in the deaths reported in Spain and France, providing some ‘light at the end of the tunnel’ as tweeted by Trump.
Whilst he was probably referring more to the potential for easing of restrictions in the US by the end of April, it summed up the confidence in markets with the S & P 500, a US Stock market climbing to some of its biggest daily gains since the Great Depression.
This confidence also fed through to the Aussie which benefits from improvements in global sentiments on trade, because of its reliance on exports and a healthy global economy. GBPAUD levels are back below 2 on the interbank rate but remain very close to it, speak to our team to learn more about what lies ahead for the pound to Australian dollar exchange rate.
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