GBP/EUR: Pound Higher vs. Euro Ahead of UK Austerity Budget
  • Australian consumer confidence back at pre-coronavirus levels
  • Australian – China tensions keep investors jittery
  • Pound (GBP) weighs up reopening optimism vs BoE keeping negative rates in mind
  • At 08:15 UTC, Pound to Australian Dollar (GBP/AUD) is trading -0.2% at 1.8250

The Australian Dollar is moving cautiously higher versus the Pound, clawing back losses from the previous session. The Pound Australian Dollar exchange rate closed +0.9% at 1.8288, after easing back from a 1 week high of 1.8336.

At 08:15 UTC, GBP/AUD is trading -0.2% at 1.8250, this is towards the lower end of the daily traded range of 1.8226 – 1.8336.

The Australian Dollar is moving tentatively higher, boosted by a cautiously optimistic mood in the market and following encouraging domestic data. The Westpac Consumer Confidence Index rose 6.3% to 93.7 in June, up from May’s 88.1. The data revealed that sentiment has recovered and is back around pre-coronavirus levels. Confidence has been buoyed by the government’s success in bringing covid-19 outbreak under control and the further easing of lockdown measures.

Whilst domestic data is supporting the Aussie Dollar, anxieties over Australian – Chinese relations still linger. Australian Trade Minister S. Birmingham raised concerns over the economic outlook if Chinese students opted to stay away from Australian universities. His concerns come after China warned Chinese students against going to study in Australia for reasons of racism. This is just the latest escalation of tensions following Australia’s support of an independent inquiry into the origins of coronavirus and its spread in China.

China is Australia’s principal trading partner so any souring of relations could come with serious economic consequences for Australia.

The Pound is trading mixed versus its major peers as investors weigh up comments from Bank of England’s deputy governor John Cunliffe over negative interest rates, with optimism surrounding the reopening of the UK economy.

The British Business Secretary Alok Sharma confirmed that all shops are able to reopen on 15th June. Drive in cinema’s, zoos and safari parks will also be able to reopen. As restrictions are eased, consumers will be able to start spending again. This is extremely important for the UK economy which is so heavily dependent on the consumer.

There is no high impacting UK data due for release today. Investors will look ahead to Friday’s GDP figures, which are expected to show the UK economy contracted -18.4% in April, down from -5.8% in March.