The Pound has edged southwards versus the Australian Dollar across the European session on Wednesday. This is the second straight session that the Pound has lost ground to the Aussie Dollar. The Pound is under pressure following a 50-basis points rate cut from the Bank of England and following huge fiscal stimulus from the UK Chancellor.

At 15:40 UTC, GBP/USD was trading -0.2% at 1.9809. This is mid-way between the day’s range of 1.9747 – 1.9907.

Pound Digests Government’s £30 Billion Fiscal Stimulus Package

Wednesday has been a busy day for Pound investors. First up, the Bank of England made a surprise emergency rate cut of 50 basis points. A few hours later the Chancellor of the Exchequer Rishi Sunak unveiled a huge fiscal stimulus package to the tune of £30 billion, ending austerity in the UK. Yet the combined and coordinated approach has failed to underpin the Pound.

Going into the Budget, the markets were most concerned about immediate measures to support smaller businesses through the supply shock / demand shock which coronavirus will bring and the negative impact on cash flow. Rishi Sunak has brought in measures to help the UK economy through this challenging but temporary hit. This should help the pound’s short-term prospects. However, uncertainty surrounding UK – EU trade talks is likely to drag later in the year.

After a busy couple of days, there are no high impacting releases for the Pound on Thursday. Investors will wait for the dust to settle on today’s action to assess the end result.

Aussie Dollar Rises Despite Consumer Confidence Declining

The Australian Dollar is managing to advance on Wednesday despite Westpac’s Consumer Confidence Index in Australia slumping to -3.8% in March, a 5 year low. This was well down from +2.3% in February and also fell short of analyst’s expectations of -0.4%. This data shows the impact that coronavirus is starting to have on Australian consumers.

Expectations are growing that the Reserve Bank of Australia will cut interest rates again to support the Australian economy.

Investors will now look ahead to Australian consumer inflation expectations for March, due to be released later today.