GBP/AUD Possible Continued Growth
The GBP was under back pressure after Moody’s subsequent downgrade of the UK’s credit rating by one notch to Aa3 due to a huge economic hit from the coronavirus crisis, Brexit and the lack of clear budget plans by Prime Minister Boris Johnson’s government.
Moody’s said that Britain’s growth was “significantly weaker than expected and will probably be the same in the future.”
The fall to the older version was another blow for Johnson. He faces attack from opposition parties and MPs in his Conservative Party. Particularly, for how he’s dealt with the pandemic. Covid-19 killed more people in Britain than anywhere else in Europe. In fact, Corona cases continue to grow in Britain.
Reserve Bank of Australia’s Governor Phillip Lowe’s recent hint about an extension of the bond purchase programs to longer (10Y) maturities has the market in anticipation of the move happening as soon as the 3rd November policy meeting. Corona cases in Australia are falling, which could give strength to the Australian dollar.
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