The pound benefitted as the UK government offered new support for the self-employed and the Bank of England kept monetary policy unchanged.
GBP/AUD was up by 120 pips (+0.61%) to 2.0053 with a daily range of 1.9843 to 2.0168 as of 5pm GMT.
The currency pair is oscillating around the 2.00 level after a late rally on Wednesday that followed through into early Thursday, leaving it flat on the week to date at -0.07%.
British pound gains as Sunak announces support for self-employed
The government announced a ‘Self-employed income support scheme’ which involved a taxable grant of up to 80% of average profit over last 3 years with a cap of £2500. The 80% and £2500 cap match the same offer made to employees of firms who have seen business come to a halt because of travel restrictions and stay at home orders
The UK government tonight announced there had been 13,000 enquiries into its ‘Business Interruption loans’ and that large UK employers including Prêt a Manger were using the schemes to keep employees.
There was some relief that central bankers held back from slashing UK rates for a third time this month. The Bank of England made no changes but left the door open to further monetary easing if needed. In its official statement the central bank said it “stands ready to respond further as necessary.”There appears to be no intention of negative interest rates so any further easing will be through the form of quantitative easing. In reference to its QE program, the central bank said: “If needed, the MPC can expand asset purchases further.”
The Australian dollar is benefitting as global risk sentiment improves but concerns are building over the increasingly restrictive policies being put into place to hold the spread of the coronavirus at bay.
Australia could soon be forced to increase its response to ‘stage 3 lockdowns’ which would mean stricter say at home orders and state border controls being enforced on a national level.