The British pound is higher against the Australian dollar on Wednesday.
- Investors tuning into testimony from Apple, Amazon, Alphabet, Facebook CEOs
- FX volatility dropped in run up to Federal Reserve Meeting
- Virus cases in China reach highest since April
- Hong Kong’s Carrie Lam says on verge of ‘large scale’ outbreak
GBP/AUD was down by 22 pips (-0.11%) to 1.8894 as of 4pm GMT. This week the pound is up +0.50% over the Australian dollar.
The currency pair saw a midday dip below 1.805 but eventually fired back up to 1.81 for a new 2-week high. Yesterday it gained 0.27%.
GBP: Fifth daily gain for Sterling
Sterling continues to trudge higher against the Aussie, on course for its 5th successive daily gain.
Market attention was mostly fixated on the afternoon testimony of Big Tech CEOs in an antitrust hearing being held by Congress, as well as the Fed rate decision.
Economic data has been ticking higher in the United Kingdom, which opened up its economy a lot later than Australia, which is still experiencing its second wave in the state of Victoria. 40,000 new UK June mortgage approvals beat expectations of 35,000 according to the BOE stats released Wednesday. New home and car sales have been booming as the economy re-opened with housing getting government support in the form of a stamp duty holiday until the end of the year.
AUD: Rising virus cases in China
Rising virus cases in Hong Kong and in the Mainland are putting China’s economic revival at risk. Yesterday Fitch predicted China would grow by 2% this year but that will not be possible if there is a severe second wave. 64 new locally transmitted cases were reported on Tuesday, 57 from the Chinese region of Xinjiang.
There is lower than average volumes ahead of the FOMC meeting. The dollar is mostly trending lower while FX cross rates are trading sideways. Both the Australian dollar and the British pound have been gaining over the US dollar with GBP/USD at 1.30, the AUD/USD near 0.72- but the pound has the edge.