Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Muted as Aussie Unemployment to Jump Above 13%
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate remained flat on Monday morning. This left the pairing trading at around AU$1.8254.
The US Dollar slumped during early Monday trading which offered riskier assets such as the ‘Aussie’ an upswing in support.
Some analysts argued the jump in risk appetite was due to the rise in sentiment attributed to US regulators approving a Covid-19 treatment.
On Sunday, the US granted ‘emergency use authorization’ for treatment using blood plasma of patients that have recovered from the coronavirus.
However, this also offered Sterling some support, which left the currency flat against the Australian Dollar.
These gains could be limited as head of investment research at BDSwiss Group, Marshall Gittler warned of a false risk-on mood. He also questioned whether this represented a real treatment breakthrough or if it was timed to help US President Donald Trump ahead of the Republican National Convention.
The ‘Aussie’ was also able to benefit earlier this morning despite the Australian treasury stating that it is likely unemployment will jump above 13%.
Sterling (GBP) Flat as Brexit Stalemate Leaves Markets ‘Disappointed’
The Pound continued to remain on the backfoot today, after suffering losses at the end of last week’s session. Downbeat sentiment left the British currency flat against the Australian Dollar.
A mix of Brexit pessimism and a stronger US Dollar weighed on the British currency. There was little progress made at the latest round of UK-EU trade talks.
Both sides blamed each other for the current stalemate, with the EU’s chief negotiator, Michel Barnier stating:
‘Those who were hoping for negotiations to move swiftly forward this week will have been disappointed.
‘This week, once again, as in the July round, the British negotiators have not shown any real willingness to move forward on issues of fundamental importance for the European Union. And this despite the flexibility which we have shown over recent months.’
Meanwhile, Barnier’s British counterpart, David Frost said a deal was ‘still possible’, but would not be easy to achieve.
He stated:
‘There are […] significant areas which remain to be resolved and even where there is a broad understanding between negotiators, there is a lot of detail to work through. Time is short for both sides.’
Pound Australian Dollar Outlook: Will Risk Appetite Buoy AUD?
Looking ahead, the Pound (GBP) could slump further against the Australian Dollar (AUD) following the release of the latest CBI Distributive Trades data.
If the data from the Confederation of British Industry disappoints markets after last month’s reading jumped to its highest level since April 2019, Sterling will slide.
Meanwhile, the ‘Aussie’ could continue to benefit from the increase in risk appetite. If markets continue to remain optimistic about the US treatment for coronavirus patients, it will send the Pound Australian Dollar (GBP/AUD) exchange rate higher.
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