GBP/AUD Exchange Rate Sinks as ‘Aussie’ Buoyed on Positive Risk Sentiment
The Pound to Australian Dollar (GBP/AUD) exchange rate fell by -0.2% today, with the pairing currently trading around AU$1.99.
The risk-sensitive Australian Dollar (AUD) continues to benefit from a dropping number of coronavirus cases in hotspots throughout Europe, such as Italy and Spain.
Risk sentiment also rose after the city of Wuhan in China reopened after its battle with the coronavirus.
Consequently, the ‘Aussie’ benefited from the glimmer of home for Asian markets as the Chinese economy can now begin to take steps towards a recovery.
The Australian Dollar (AUD) has also gained on hopes that both Australia and New Zealand may have stopped the virus in its tracks, with Australia’s Prime Minister Scott Morrison hopeful that its nation had contained much of its spread.
Scott Morrison said this week:
‘We have so far avoided the horror scenarios that we have seen overseas, whether it be initially in China in Wuhan, or in New York in the United States, or Italy, or Spain, or even the United Kingdom.’
‘But we must hold the course. We must lock in these gains.’
Pound (GBP) Falls Despite Hopes of Boris Johnson’s Recovery
The Pound (GBP) struggled to make headway against the ‘Aussie’ despite Chancellor Rishi Sunak’s encouraging comments that Prime Minister Boris Johnson’s condition was ‘improving.
Culture Minister Oliver Dowden said that Johnson’s condition is ‘stable, improving, sat up and engaged with medical staff’, adding: ‘I think things are getting better for him’.
However, the UK’s coronavirus-related death toll continues to rise both in Scotland and Wales, leaving some Pound investors jittery as it likely to face several weeks of lockdown.
Scotland’s First Minister, Nicola Sturgeon, commented:
‘I don’t think there is any possibility, any likelihood of these lockdown measures being lifted immediately or even imminently. We don’t yet really have enough data from what has happened so far to know for sure the impact they’re having.’
‘None of us want these measures to be in place for a single minute longer than they have to be but it’s really important that we stick with it.’
With the UK’s lockdown set to continue, the GBP/AUD exchange rates is likely to remain subdued as the nation’s economic situation looks bleak.
GBP/AUD Forecast: ‘Aussie’ to Edge Higher on Improving Risk Sentiment?
The Australian Dollar (AUD) is likely to continue to benefit from rising risk sentiment into the weekend. If nations like Italy and Spain continue to record a lowering number of cases, we could see the ‘Aussie’ make considerable gains as markets let out a sigh of relief.
The Pound to Australian Dollar (GBP/AUD) exchange rate will continue to be dictated by Prime Minister Boris Johnson’s health status into next week. Any signs that the PM could return to his normal functions would provide some stability in the UK’s political affairs and boost Sterling.