The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
As the Australian dollar functions as a proxy for sentiment towards the Chinese economy, the evidence of a greater recovery in industrial activity gave AUD investors cause for confidence.
This helped to limit the impact of a deeper-than-expected decline in the third quarter Australian private capital expenditure data, which showed that business investment had continued to decline.
Meanwhile, an unexpected narrowing of the New Zealand trade deficit for October offered a boost to the New Zealand dollar, meanwhile.
As long as market risk appetite remains elevated on vaccine-driven recovery hopes, NZD exchange rates will likely remain strong.
On the other hand, the Australian dollar looks vulnerable ahead of the Reserve Bank of Australia’s (RBA) December policy announcement.
If policymakers opt to loosen monetary policy at this stage, or even signal greater worries over the economic outlook, this could see the Australian dollar fall out of favour again.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)