GBP/AUD Exchange Rate Flat Ahead of PM’s Daily Briefing
The Pound to Australian Dollar (GBP/AUD) exchange rate is currently rangebound this morning as Boris Johnson prepares to update the UK on the steps being taken to defeat the coronavirus.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.9072, virtually unchanged from this morning’s opening rate.
How Might the PM’s Update Impact the Pound (GBP)?
Prime Minister Boris Johnson is due to hold the government’s daily coronavirus briefing for the first time in almost a month this evening and investors are watching closely to see how this may influence the Pound (GBP).
Downing Street has said Johnson will update the UK on the ‘fight against [the coronavirus] and the steps we are taking to defeat it’.
The PM is likely to face a grilling over shortages of PPE equipment for NHS workers as well as the government’s failure to meet its target of 100,000 daily coronavirus tests by the end of April.
Johnson will also discuss the potential barriers to easing the lockdown, such as ensuring that the curve remains flat by keeping the ‘R’ rate of infection –that is the rate at which someone is infected with the virus is passing it on to another- as low as possible.
However, most crucially for traders, the PM is expected to remain vague on the possible timetable for easing restrictions.
This is likely to frustrate GBP investors as the uncertainty over the UK’s lockdown remains a limiting factor on the Pound.
This will also do little to dissuade speculation that the government will extend the lockdown, any hints of which are likely to heap more pressure on Sterling sentiment.
Australian Dollar (AUD) Muted as Chinese PMIs Fall Short
Meanwhile, the Australian Dollar (AUD) appears to have run out of momentum this morning following the release of the latest PMI figures from China.
According to government figures, activity in China’s manufacturing sector was close to stalling in April, disappointing investors who had been hoping China’s factories would have continued to bounce back strongly following the country’s coronavirus outbreak.
The disappointing result proved particularly damaging to the ‘Aussie’ as it will likely translate into less demand for raw materials of which Australia is a major exporter to China.
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