gbp-aud-forex
  • Australian Dollar (AUD) under pressure as covid cases continue to rise and Melbourne’s lockdown restrictions tighten
  • Coronavirus fears offset encouraging Chinese manufacturing data which shows economic recovery in China is gaining momentum
  • Pound (GBP) trades mixed versus major peers amid growing concerns over a second wave
  • UK manufacturing PMI to confirm steady expansion in the sector

The Pound Australian Dollar (GBP/AUD) exchange rate is heading higher at the start of the new month. The pair continues a phenomenal run which has seen it rally for 9 straight sessions.

At 08:15 UTC, GBP/AUD trades +0.44% at 1.8388. The pair rallied 1.7% across the previous week.

The Australian Dollar is under pressure amid rising concerns surrounding the coronavirus outbreak in the state of Victoria and its impact on the Australian economy. The Australian state of Victoria declared an official state of disaster and imposed sweeping new restrictions over the weekend in an attempt to control the coronavirus pandemic. The lockdown which so far shows few signs of working is expected to be in place until September. This will have economic consequences.

Investors will now look ahead to the Reserve Bank of Australia’s monetary policy announcement. Whilst no change in policy is expected the tone of the RBA will be closely monitored given the rising risks from a second wave of infections and amid concerns over deflation.

Upbeat data from China, Australia’s largest trading partner has largely been shrugged off by Aussie Dollar investors. According to the Caixin / Markit data China’s factories staged an impress jump in activity in July. The PMI climbed to 52.8 in July, up from 51.2 in June and is well above expectations of 51.3. This as the largest jump recorded in almost a decade and also the third straight month of growth for the sector indicating that the economic recovery in China is proving to be gaining momentum.

The Pound is trading mixed versus its peers amid rising concerns of a second wave of coronavirus infections and more localised lockdowns. So far, parts of Manchester, Lancaster and Yorkshire have seen lockdown restrictions tighten. Fears are growing that London could be heading in the same direction after Junior Business Minister Nadhim Zahawi said that the British government would not hesitate to act if transmission rates increased.

UK manufacturing PMI data is in focus, with analysts expecting a confirmation of the 53.6 preliminary reading.