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GBP/AUD Exchange Rate Climbs to Three-Week High But Struggles to Push Further

Australian Dollar Currency Forecast

The Pound to Australian Dollar (GBP/AUD) pushed higher this morning, though has found its gains limited as the UK continues to struggles against its coronavirus situation and lockdown restrictions.

At the time of writing the GBP/AUD exchange rate is trading at around AU$1.7775.

Pound (GBP) Muted as Coronavirus Deaths Pass 100,000

The Pound has found some small gains against the Australian Dollar this morning, though the GBP exchange rate appears to have softened as the UK passes 100,000 coronavirus deaths since the pandemic began.

Leading a press conference on Tuesday evening, Prime Minister Boris Johnson stated that the government had done everything they could to combat the virus.

The Prime Minister said:

‘I’m deeply sorry for every life that has been lost, and, of course, as prime minister, I take full responsibility for everything the government has done. What I can tell you is that we truly did everything we could and continue to do everything that we can.’

Though speaking to Sky News this morning, Communities Secretary Robert Jenrick said that the UK’s coronavirus response would have been different ‘with the benefit of hindsight’ sparking concerns that the government is still split on its response to the pandemic.

Investors remain jittery over how long the current lockdown measures will last, with fears they could be extended until well after Easter.

Australian Dollar (AUD) Struggles Despite Strong CPI Figures

The Australian Dollar lost traction this morning, as a better-than-expected consumer price index provided little relief for AUD.

According to data published by the Australian Bureau of Statistics (ABS), domestic inflation rose to 0.9% in the fourth quarter of 2020, beating consensus estimates of 0.7%.

The Australian Dollar may also be struggling today as there remains a watchful eye ahead of the US Federal Reserve’s interest rate decision.

Although the Fed is likely to state its commitment to its monetary stimulus and using all tools at its disposal to support the US economy, AUD investors remain cautious about any comments from the US central bank.

Pound to Australian Dollar Exchange Rate Forecast: Lockdown Restrictions to be in Focus

Looking forward, both GBP and AUD investors will focus on any further coronavirus developments, with the UK moving ever closer to the 15th of February, it’s expected lockdown restrictions will be extended which could cause the Pound to struggle.

However if the UK’s vaccination rollout is a continued success, the Pound could find its losses limited.

For Australian Dollar investors, if global cases continue to rise and vaccine rollouts are delayed, the risk-sensitive ‘Aussie’ could struggle if traders hesitate to buy into the currency.