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Pound Australian Dollar (GBP/AUD) Exchange Rate to Trade on External Factors?

Australian Dollar Currency Forecast

Pound Australian Dollar Exchange Rate to Extend Modest Uptrend?

The Pound Australian Dollar (GBP/AUD) exchange rate is currently trending up slightly as upbeat news regarding coronavirus vaccines buoys market sentiment, while rising infections cap gains for risk-on currencies.

At the time of writing, GBP/AUD is trading at A$1.8538, up 0.2% from today’s opening levels.

Pound (GBP) to Extend Upside on Covid Vaccine News?

The Pound (GBP) is currently trading up against the majority of its peers, as data suggests that a third dose of the Pfizer, Moderna or AstraZeneca vaccine will provide increased support against the Omicron variant.

Reuters cites a Danish study which found that Moderna and Pfizer vaccines offer a ‘significant increase’ in protection for the elderly, while Oxford University scientists are confident that an updated version of the AstraZeneca vaccine could be used to ‘respond to any new variant more rapidly’ than previously believed.

The Financial Times also references a study of the Novavax inoculation, which demonstrated strong immune responses against the Omicron variant and other variants of the coronavirus: the company says it could begin manufacturing its Omicron-specific vaccine in early January and start clinical trials in the first quarter of 2022.

The seeming success of several vaccines has helped to alleviate concerns over the UK’s escalating number of Covid cases: yesterday, the country’s daily caseload exceeded 100,000 for the first time, reaching 106,122.

However, scientists warn that while Omicron cases in the U.K. seem milder overall – especially for jabbed individuals – symptoms are not necessarily mild enough to avoid large numbers of hospitalizations. Further bearish messaging could cap Sterling gains ahead.

Australian Dollar (AUD) to Sink on Covid Headwinds?

The Australian Dollar (AUD) is currently trading in a mixed range against its peers, with downside limited by upbeat news regarding vaccinations.

Waning concerns that the new fast-spreading variant could derail the economic recovery have prompted more bullish trading, as the most comprehensive study yet to compare variants’ severity inspires confidence.

According to Nicole Walter of the National Institute for Communicable Diseases in Johannesburg:

‘Early analyses suggest a reduced risk of severe disease when compared to earlier Delta-infected individuals – although some of this reduction is likely a result of high population immunity.’

Nevertheless, medical experts have caveated reassurances with warnings that this study alone ‘is not proof’, as it uses ‘historic controls’ comparing Omicron cases in October and November with Delta infections in April: if a cautious tone persists, overall risk sentiment may dampen, weakening AUD appeal.

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