The Australian Dollar continued its ascent versus the Pound on Friday, for a fifth straight day. The Australian Dollar settled on Thursday 1.2% stronger versus sterling on upbeat Chinese data.
At 09:15 UTC, GBP/AUD is trding -0.1% at 1.0915 amid broad risk on sentiment and despite words of warning from the Reserve Bank of Australia (RBA). The Australian Dollar is on track to have gained 2.3% versus the Pound this week, adding to the 4.4% rally in the Australian Dollar across the month of April.
US China Trade Talk Boosts Aussie Dollar
The perceived riskier Aussie Dollar is trending higher on US – China trade optimism. News that China and the US had a constructive phone call on trade has increased risk sentiment across the financial markets. Investors are ditching safe haven assets and currencies for riskier investments. Stock markets across the globe are advancing.
The Australian Dollar is buoyant despite the RBA warning in its quarterly review that the economy will contract by 6% across the year. The central bank also expects unemployment to rise to a peak of 10% in June versus a previous forecast of 5.2%. However, the RBA remains committed to support jobs and incomes as the country faces its biggest economic contraction on record.
UK Lockdown Exit Strategy In Focus
The Pound is out of favour amid expectations that Boris Johnson will only marginally ease lockdown restrictions on Sunday, when he lays out the UK’s lockdown exit strategy. The infection rate in the UK has climbed slightly which is dashing hopes of any major reopening of the UK economy, which has been on lockdown for 6 weeks.
Adding to the Pound’s woes, data revealed that UK consumer confidence remains near record low levels. According to data from GFK, consumer morale ticked higher to -33 in the second half of April, up from -34 in the first half of the month. However, it remains close to the all time low as the country heads towards its deepest recession in 300 years.
The data comes after the Bank of England warned in the previous session that the UK economy was on track to contract -14% this year as a result of the lock down measures paralysing the economy.
