GBPAUD was trading lower by 0.21% on Monday as the U.K. Prime Minister announced a month-long lockdown for England. Tomorrow sees the Reserve Bank of Australia (RBA) releasing its latest interest rate and monetary policy guidance which could see volatility.
U.K. Prime Minister Boris Johnson has announced the latest month-long lockdown for the country in line with other European nations. The news comes at the same time as Australia saw its first virus-free day in five months, including in the troubled state of Victoria. The latest move by the U.K. should keep pressure on the pound.
Tomorrow sees the RBA announcing the latest moves on interest rates and monetary policy, where some see the bank cutting interest rates and potentially introducing a bond-buying program. Analysts see a 0.15% cut in Australian rates to 0.1%, as already being priced into markets. Some also see an AUD$140bn bond program.
When the dust settles on the RBA announcement, we will get the same release from the Bank of England with traders expecting them to hold rates at 0.1%, but to initiate a fourth virus-led stimulus of £100bn. The second round of lockdowns could see that as a done deal with further damage to the economic growth outlook.
GBPAUD is trading around 1.8400 and the Aussie has made muted gains on the U.K. lockdowns. The market will move on the RBA tomorrow and BoE Thursday. A bearish close today could setup further gains in the AUD. Traders could go short today on a bearish close with a stop above today’s high. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
