GBP/AUD Exchange Rate Rises as UK Further Eases Covid-19 Restrictions
The Pound Australian Dollar exchange rate rose by 0.4% today as the UK prepares to further ease lockdown restrictions, by allowing for indoor gathering for restaurants and pubs. The pairing is currently fluctuating around AU$1.82.
Sterling has benefited from growing confidence in the UK economy, now that more businesses such as pubs, restaurants, and gyms are able to function to a much greater extent.
Prime Minister Boris Johnson has however urged that people move with a ‘heavy dose of cautious’ as the Indian Covid-19 variant threatens to derail the Government’s roadmap for further easing of lockdown measures.
Matt Hancock, the UK Health Minister, has also expressed confidence in vaccines working against the Indian variant.
Hancock said:
‘[T]he good news is because we have increasing confidence that the vaccine works against the variant, the strategy is on track – it’s just the virus has gained a bit of pace and we’ve therefore all got to be that bit more careful and cautious.’
However, some GBP investors are remaining cautious, as the Indian variant’s transmissibility is largely as yet unknown.
Australian Dollar (AUD) Exchange Rate Struggles as Chinese Data Underwhelms
The Australian Dollar (AUD) struggled today after Australia’s largest trading partner – China – revealed weaker-than-expected Chinese retail sales.
Bruce Pang, head of macro and strategy research at China Renaissance, commented on the data:
‘China is still seeing an unbalanced recovery, as employment, household income, consumption, manufacturing investment, (the) service sector and private firms have yet to come back to (the) pre-Pandemic level.’
As a result, AUD investors have become more worried about the outlook for Australia’s economy now that the Chinese economy is showing signs of slowing down.
Added to this, risk-off trade has also limited the appeal of the risk-sensitive ‘Aussie’ today, sending the AUD/GBP exchange rate lower at the beginning of this week’s session.
Increased demand for safe-haven currencies like the US Dollar has also dented the Australian Dollar’s appeal today.
Indian Covid-19 variant fears are continuing to cause widespread concern, as it is still as yet unknown whether the virus can resist vaccinations, as well as uncertainty surrounding its overall transmissibility.
GBP/AUD Exchange Rate Outlook: Could Falling UK Joblessness Boost the Pound?
Australian Dollar (AUD) traders will be looking ahead to tomorrow’s release of the latest Reserve Bank of Australia’s (RBA) Meeting Minutes.
Any dovishness from the RBA about the outlook for Australia’s economy would be AUD-negative.
AUD traders will also be awaiting this week’s publication of the latest Australin consumer confidence gauge for May. If this improves, however, then the Australian Dollar could begin to head higher against the Pound.
Pound (GBP) traders will await tomorrow’s release of the latest ILO unemployment rate for March. If joblessness continues to fall, then the Pound Australian Dollar exchange rate would head higher this week.
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