GBP/AUD ExchRate Falls in Risk-On Trade
The Pound to Australian Dollar (GBP/AUD) exchange rate is currently trading close to its lowest in almost a year. The Australian currency is turbocharged by risk-on trade.
The GBP/AUD exchange rate was trading at around AU$1.7780. It was down by 0.3% from this morning’s opening rate in forex trading.
GBP/AUD: AUD Soars on Rising Market Optimism
The Australian Dollar (AUD) continues to edge higher today. Burgeoning market optimism fuels demand for the high-yield currency.
A notable risk-tone has emerged this week, with a deal on the EU’s coronavirus relief fund. Reports of multiple promising coronavirus vaccine candidates are helping to turbocharge market optimism and hopes of a swift global recovery.
This has also pushed the safe-haven US Dollar (USD) into a freefall. In turn, it has given AUD exchange rates even more room to run.
Jeffrey Halley, Senior Market Analyst at OANDA, said that the overnight session was notable. This was for the indications for renewed energy in the great US Dollar rotation trade.
The Dollar fell almost everywhere in the FX markets with the tailwinds from the EU pandemic package. The inspiring news on the Covid-19 vaccine front turned into hurricane-force winds, Halley added.
The publication of Australia’s latest retail sales figures also further buoyed the ‘Aussie’ in early trade today.
According to preliminary figures published by the Australian Bureau of Statistics (ABS), sales growth climbed 2.4% month-on-month in June. That was a strong result in light of the record 16.9% surge in sales in May.
The ABS also noted a strong pick-up in sales in cafes, restaurants and clothing retail. This bolstered hopes that Australia’s economy could bounce back quite quickly.
Consumers appear keen to return to pre-lockdown activities.
GBP/AUD: GBP Undermined by Brexit Uncertainty
The Pound (GBP) is struggling to hold its ground against a surging Australian Dollar (AUD) in forex this morning. The lingering Brexit concerns are also dragging on Sterling sentiment.
The UK and EU are still deadlocked on a number of key issues, in spite of a month of ‘intensified’ negotiations. Reports suggest that Boris Johnson is close to abandoning trade talks.
Reports said that ministers are already working on the assumption of a no-deal Brexit. The government plans to trade on World Trade Organisation (WTO) terms from next year.
The threat of a no-deal Brexit has always unnerved GBP investors. But they are thought to be particularly worried about the potential economic impact. That is, in light of the challenges posed by the coronavirus crisis.
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