The British pound is lower against the Australian dollar on Wednesday.
- Exchange rate falls to lowest since September, 2019
- Nearing key 1.80 round number
- Chinese airline carriers blocked from bringing passengers to US
- OPEC meeting delayed over compliance issues
GBP/AUD was down by 53 pips (-0.28%) to 1.8147 as of 4pm GMT.
The currency pair sunk below 1.81 to a new 8-month low before rebounding over 1.82 and later slipping to turn lower on the day. Yesterday the exchange rate fell -0.96% leaving it on course for its fourth daily loss in a row and weekly drop of -2.01%.
GBP: Sterling second-best amid optimism
Sterling continues its 2-month drubbing at the hands of the Aussie dollar. Better than hoped UK economic data and talk of a Brexit compromise have failed to prevent another weekly stampede.
Risk sentiment has been on the rise and the Aussie has been judged by investors to be the more likely destination for a tightening in monetary policy if/when the economic backdrop improves.
Much fewer private job losses in the United States than expected added to a general sense of optimism over the economic reopening and record levels of government stimulus. US ADP data showed -2,760,000 jobs were lost in May versus -9,000,000 expected. Although the two datasets are not always correlated, it bodes well for the official BLS US jobs report on Friday.
AUD: US-China relations not a factor
Helped on by yesterday’s decision to keep monetary stimulus in place with record low interest rates in Australia, the Australian dollar hit an 8-month high versus Sterling and nears the key 0.70 figure versus the US dollar (AUD/USD).
Risks on the horizon over US-China relations have not been a factor. Effective June 16, Chinese carriers will no longer be allowed to bring passengers to the United States according to Reuters. Equally, a decline in oil markets did little to dent the good mood. Russia and Saudi Arabia are waiting for commitment from other nations on compliance before agreeing to an extension to production cuts.
