Pound Australian Dollar Exch Rate Slides
The Australian Dollar edged higher against the Pound with the Reserve Bank of Australia’s interest rates at an all-time low.
However, the AUD rallied with the bank sounding less gloomy, as the economy gradually reopens after coronavirus lockdown measures.
The RBA left rates at 0.25% in its monthly monetary policy meeting as expected. The bank noted that they would maintain the accommodative approach as long as it was necessary.
Following the decision, RBA Governor Philip Lowe noted the bank was ready to scale up government bond purchases if necessary.
Australia’s economy is experiencing its largest contraction since the 1930s in the current quarter. But, Lowe noted it is possible that the depth of the downturn will be less than earlier expected.
Moreover, the RBA chief noted there has also been a pick-up in some forms of consumer spending. This offered AUD further support.
Sterling (Pound) Slides Ahead of Brexit Talks
The Pound slipped against the Australian Dollar today as risk appetite amongst forex investors improved. Traders flocked to riskier assets over-optimism about a global economic recovery.
This allowed AUD to edge higher, while Sterling was able to climb to a one-month high against the US Dollar.
However, these gains were limited by the growing unrest in the United States amid concerns over US-China tensions.
The Sterling was offered some support as today will be the latest round of Brexit negotiations between the UK and EU.
The next round of talks is expected to focus on fisheries. Reports have suggested the UK is expected to indicate flexibility over this key sticking point.
Reports say London will be flexible if Brussels agrees to lessen its maximalist demands.
Pound Australian Dollar Outlook
The Australian Dollar could give up some of today’s gains against the Pound following the release of first-quarter GDP data.
If GDP plummets further than expected in the first three months of 2020 the Aussie will suffer further losses.
Forex forecasts Sterling could edge higher against the AUD if Brexit negotiations with the European Union show signs of progress.
If the latest round of post-Brexit trade talks shows signs of progress it will boost the British currency. Also, it can send the Pound Australian Dollar (GBP/AUD) exchange rate higher.
In forex news, the AUD surges on iron ore and economic optimism, even as recession looms.
