GBP/AUD Exchange Rate Rebound Attempts Fall Short amid Australian Dollar’s Strength
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate tumbled at the end of last week, and since then has been struggling to advance again. While the Pound (GBP) outlook is benefitting from coronavirus recovery hopes, the Australian Dollar (AUD) is appealing as well.
Last week GBP/AUD opened the week at the level of 1.7853, and spent most of the week trending higher. Towards the end of the week, GBP/AUD touched on a high of 1.8012, the best level for the pair in a fortnight.
After that high though, GBP/AUD plummeted as the Australian Dollar capitalised on the market’s mood. In the end, GBP/AUD ended the week much lower at the level of 1.7802.
This week so far, AUD has attempted to keep pushing GBP/AUD lower. GBP/AUD touched on a February low of 1.7757 earlier today though the pair is trending just above the week’s opening levels at the time of writing.
The Pound and Australian Dollar outlooks are both strengthening, but strong Australian wage data could give AUD the upper hand later in the week.
Pound (GBP) Exchange Rates Strong despite Worrying Factors in UK Job Market Outlook
The Pound continues to be one of the most appealing major currencies on the market. As investors bet on Britain’s potential to recover from the coronavirus pandemic before other major economies, Sterling’s outlook continues to climb.
Even with yesterday’s slower than hoped roadmap for easing UK restrictions and today’s mixed UK job stats, the Pound benefits from broad market demand.
While the Pound largely brushed over today’s UK job data though, analysts are expressing concern about the outlook for Britain’s job market and retail sectors.
Australian Dollar (AUD) Exchange Rates Benefit from Market’s Rush into Commodities
Since the end of last week, investors have been piling into commodities. Expectations for the global economy to recover from the coronavirus pandemic in the coming months led to higher expectations for products and commodities.
This has been boosting commodities and assets correlated to commodities, like the Australian Dollar.
The Australian Dollar is a currency correlated to risk and trade sentiment. This combined with recent resilience in Australia’s economy have made the Australian Dollar broadly appealing lately.
According to Analysts at Westpac:
‘Dividend announcements for Australian mining companies that tend to announce in US$ and offer payment in A$, and the prospect of even larger dividends later in the year adds to the A$ demand story,’
Pound to Australian Dollar (GBP/AUD) Exchange Rate Awaits Australian Wages Report
Most of this week’s notable UK news and data has been published already. As a result, the Pound to Australian Dollar exchange rate may be more driven by Australian Dollar movement in the coming sessions.
Tomorrow’s Asian session will see the publication of Australia’s Q4 2020 wage price index report. It is likely to be the biggest data of the week for the Australian Dollar.
Towards the end of the week, Australian private capital and private sector data will be published, as well as UK car production stats. These stats are unlikely to be too influential, and GBP/AUD will be driven more by Australia’s job market outlook and coronavirus news.
Of course, if investors remain optimistic about Britain’s coronavirus recovery outlook, the Pound is more likely to hold its ground and avoid huge losses even if Australian data impresses.
However, some analysts believe the Pound could be in for a correction soon. This means the Pound to Australian Dollar (GBP/AUD) exchange rate will be focused on Australian data and Pound resilience in the coming sessions.