The British pound is lower against the Australian dollar on Monday.
- China shares shot higher with gains of over 5% on the day with the highest trader activity (volume) since 2011
- The Australian state of Victoria closed its internal Australian border after a sudden rise in coronavirus cases
- US June ISM non-manufacturing data easily exceeds expectations
- WHO reports highest daily total of virus cases to date on Saturday
GBP/AUD was down by 95 pips (-0.52%) to 1.7906 as of 4pm GMT. Last week the exchange rate nudged higher by +0.07%.
The currency pair started the day near 1.80 but quickly rolled over before stabilising near 1.79 for its fourth daily decline in a row. On Friday it had dropped -0.19%.
GBP: Pound drops as US service sector rebounds
The British pound fell after other riskier currencies benefited more optimistic tone in markets. Better than expected economic data in the United States helped the early optimisms led by China continue into the afternoon. The US service sector improved at a much faster pace than expected according to data released o Monday.
The June US ISM non-manufacturing index rose to 57.1 versus the 50.2 expected. The sub-components of the index all saw substantial gains back into expansion territory (above 50). Business activity came in at 66.0 versus 41.0 last month (that was the highest since February 2011). New orders were 61.6 versus 41.9 last month. The one slightly worrying exception was the employment component which rose- but remained in contraction at 43.1 versus 31.8 last month.
AUD: Aussie rallies despite Victoria border closure
The local situation in Australia worsened this week after the state of Victoria- the second most populous Australian state and home to Melbourne shut its internal borders with the rest of Australia because of a rise in virus cases.
Still, optimistic investors chose to look past the highest global daily total of virus cases reported by the WHO on Saturday toward a global reopening. Even as the situation in some countries for example in Israel worsened substantially. Israel has been forced to re-introduce elements of its lockdown by closing bars, event halls and gyms.