Pound to Australian Dollar Exchange Rate Remains Near Weekly Worst
Investors have been selling the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate this week. As the Pound (GBP) is weakened by poor UK data while the Australian Dollar (AUD) benefits from resilience in risk demand, the pair has been unable to hold its ground.
GBP/AUD has shed essentially all of last week’s gains. GBP/AUD opened this week at the level of 1.8160, which was just below the week’s best level of 1.8196, but has since been falling.
After shedding over a cent at the beginning of the week, yesterday saw GBP/AUD’s losses slow. At the time of writing on Thursday morning, GBP/AUD trended near the week’s lowest level of 1.7940. This was lower than last week’s opening levels.
Market risk-sentiment continues to drive the direction of trade and this is likely to continue in the coming week as well.
Pound (GBP) Exchange Rates Struggle amid Unclear UK Job Market Report
This week’s UK data has done little to boost market optimism around the state of Britain’s economy amid the coronavirus pandemic.
UK growth rate data published earlier in the week was broadly concerning. It indicated that Britain’s economy is unlikely to see a v-shaped recovery.
Today’s UK job market report didn’t do much to help the UK or Pound outlooks either. While Britain’s key unemployment rate remained at 3.9%, the other figures indicated that this figure is missing huge uncertainty amid furloughing and job losses.
According to Matthew Percival, Director for People and Skills at the Confederation of British Industry (CBI):
‘These figures show serious difficulties for hundreds of thousands of people, but unfortunately this is still only the beginning of the impact on the labour market. Flattening the unemployment curve will remain paramount.’
Australian Dollar (AUD) Exchange Rates Hold Ground despite Optimistic Chinese Growth
The Australian Dollar has seen resilient demand in recent sessions, even as the number of coronavirus cases in the Australian State of Victoria rises.
As officials try to get a hold on the outbreak situation, concern has risen about Australia’s potential for an economic rebound. Despite this though, the ‘Aussie’ remains appealing amid a more global outlook for the pandemic.
Rising hopes that a coronavirus vaccine is seeing progress is supporting AUD. The currency has also found a little support in today’s Chinese growth data, which showed growth in Q2 2020 despite the coronavirus pandemic.
The ‘Aussie’ is often correlated to Chinese economic sentiment, due to the close trade relations the nations share.
However, concerns about China’s consumer activity weighed on market risk-sentiment today amid a dire retail sales report.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Could Remain Pressured
Tomorrow’s session will see the publication of UK consumer confidence data for July. However, as Britain’s data outlook is gloomy, this data is unlikely to have much impact unless it is highly surprising.
Instead, Pound investors may remain more focused on Britain’s coronavirus and Brexit developments. GBP/AUD may remain under pressure due to the Australian Dollar’s resilient appeal.
If speculation of a coronavirus vaccine persists, market risk-sentiment is likely to remain higher. This could help the Australian Dollar to sustain gains.
Looking ahead to next week, the Reserve Bank of Australia’s (RBA) latest meeting minutes may also influence the AUD outlook.
The Pound to Australian Dollar (GBP/AUD) exchange rate could advance instead if the RBA shows concern about Australia’s coronavirus outlook, for example.