• Australian Dollar (AUD) falls as covid-19 second wave sees Melbourne put under lockdown for 6 weeks
  • RBA keeps rates on hold as expected
  • Pound (GBP) advances despite Brexit concerns as trade talks continue
  • Pound Australian Dollar (GBP/AUD) exchange rate snaps 4 session losing streak

The Pound Australian Dollar exchange rate rallied 0.7% across the past 4 sessions, settling on Monday at 1.7914.

At 08:15 UTC, GBP/AUD trades +0.4% at 1.7985, towards the upper end of the daily traded range.

The Reserve Bank of Australia kept interest rates on hold at the record low level of 0.25%, as expected. The central bank hasn’t moved on rates since slashing them to the current level back in March as the coronavirus pandemic took hold. The RBA has no plans to start raising interest rates until 2022 as low wage growth, inflation and employment are expected to present barriers to growth.

That said, retail sales and job advertisements have rebounded strongly suggesting that the economy is recovering. However, spiralling coronavirus cases in Australia’s second largest city are unnerving investors.

New South Wales and Victoria, the most populous and economically powerful states have closed their borders. Melbourne has also gone into lockdown for 6 weeks in an attempt to contain a spike in coronavirus cases in the city.

Australia had been an exemplary case of how to bring the coronavirus outbreak under control quickly. This flare up highlights just how difficult it is to control the virus without a vaccination.

The is no high impacting Australian data due for release. This means that sentiment and coronavirus statistics will drive movement in the Aussie Dollar over the coming sessions.

The Pound is trading mixed versus its major peers on Tuesday amid lingering Brexit concerns and as investors look ahead to a mini Budget from the Chancellor Rishi Sunak.

Tomorrow Rishi Sunak will set out a rescue package to help the UK economy fight the coronavirus crisis. Stamp duty cuts, a green investment package and a huge jobs drive are all expected to be part of the Chancellor’s £3 billion giveaway.