The British pound is higher against the Australian dollar on Thursday.
The rise breaks a 10-day losing streak for Sterling against the Aussie. It marks only the second daily rise for the pound in the last twenty business days.
A rise in global risk appetite in combination with renewed confidence that the UK has seen the worst of the pandemic bolstered Sterling.
GBP/AUD was up by 296 pips (+1.56%) to 1.9310 as of 4.30pm GMT.
The currency pair found support at the big 1.90 level, and 3-month lows reached on Wednesday and rallied back strongly to retake 1.93 in a 300+ pip daily move. Yesterday the exchange rate had fallen -0.64% and the weekly return is negative at -0.30%.
GBP: Pound surges 300 pips after touching 3-month low
There was no big change in the official plan to keep lockdown measure in place in the United Kingdom with a spokesperson for Downing Street saying “We don’t want to relax the social distancing measures or do anything which could lead to the virus, which the British public have done so much to suppress, being able to spread in an exponential way again.”
However the mood had seemingly turned more positive as Prime Minister Boris Johnson chaired the daily coronavirus meeting and declared “We are past the peak”. Traders are interpreting the statement as suggesting that while the government is taking a cautious approach, the virus case numbers would suggest reopening the economy is just around the corner.
AUD: Gives up 10-day winning streak
The fall against the pound was more of a technical rebound from a big level. Oftentimes currency options traders will defend a big level such as 1.90 to prevent the triggering of unwanted orders. The currency was also looking very stretched to the upside after a month-long winning streak with barely a losing day.
Australia remains well positioned in the coronavirus pandemic versus other nations, including the United Kingdom but there are some risk events on the horizon that may have dissuaded Aussie bulls holding on into the weekend, including the RBA meeting next Tuesday.
