- Pound (GBP) is on track for weekly gains after the Chancellor announced a jobs support package
- Brexit talks could be turning a corner
- Australian Dollar (AUD) rallies as iron ore & gold rise
- No data due so sentiment to lead
The Pound Australian Dollar (GBP/AUD) exchange rate is trending lower on Friday snapping a four-day winning streak. The pair settled on Thursday +0.67% at 1.8091. At 08:15 UTC, GBP/AUD trades -0.2% at 1.8055. Yet despite the rise in the Aussie at the end of the week, the pair is on track for 2% gains across the week. Across the month to date, GBP/AUD trades just -0.3% lower.
The Pound received a boost this week after British Chancellor Rishi Sunak announced a scaled back job support scheme which will replace the current job retention scheme when it concludes on 31st of October. Unemployment in the UK is currently 4.1%. Analysts expected it to reach 7.5% by the end of the year without had the Chancellor not stepped in with another support scheme following the job retention scheme.
Brexit news has also been more upbeat with reports surfacing that the two sides could be slowly making progress after months of deadlock.
There is no data for investors to focus on today. The Pound could see muted trade as it waits for its next catalyst.
The risk sensitive Australian Dollar is edging higher on improving global risk sentiment. Renewed hopes that the US Democrats and Republicans could agree a $2.2 trillion rescue package to support the US economic recovery helped buoy the mood in the market.
The Australian Dollar is also known as a commodity currency. When the prices of commodities which Australian exports, such as gold and iron ore rise, often so does the Australian Dollar. The prospect of additional stimulus from Congress has weakened the US Dollar, which in turn has boosted the price of commodities which are now cheaper to buy for foreign buyers.
There is no high impacting Australian data due. The pair will be driven by sentiment heading into the weekend.