Pound to Australian Dollar Exchange Rate Rebounds amid Winter Coronavirus Jitters
Demand for the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was a little higher today. The Pound outlook remains higher on Brexit hopes and UK data, while the outlook for risk-correlated currencies is weighed by coronavirus fears.
Following last week’s mixed movement and eventual modest gains, GBP/AUD is once again seeing mixed movement this week.
After opening this week at the level of 1.8149, GBP/AUD slipped lower, before rebounding and briefly rising higher. At the time of writing though, GBP/AUD is trending closely to the week’s opening levels.
Pound (GBP) Exchange Rate Outlook Buoyed by Hopes of Brexit Deal Soon
While there has been no noteworthy Brexit developments this week so far, markets remain cautiously optimistic that there will still be progress soon.
The Pound outlook has been higher recently amid expectations that UK and EU officials will reach an agreement on Brexit sometime this month. So far, a deal is still expected even as progress continues to be seemingly delayed.
These expectations are keeping Sterling afloat.
The Pound also found a little boost from this morning’s UK inflation rate report. However, analysts warn that higher inflation is unlikely to last amid Britain’s second coronavirus lockdown.
Australian Dollar (AUD) Exchange Rates Slip as Winter Coronavirus Fears Rise
The Australian Dollar is a currency often correlated with market risk and trade sentiment. It is often stronger in times of market uncertainty.
While it briefly surged on this week’s coronavirus vaccine news, it has since fallen as markets reassess how damaging the coronavirus pandemic is still expected to be this winter.
It makes similar movement to last week for the ‘Aussie’.
Analysts at ANZ Bank said:
‘It’s back to pondering short-term negatives vs longer-term vaccine positives, and that’s creating volatility,
Vaccine deployment isn’t an immediate fix … expect things to remain mixed and messy.’
Pound to Australian Dollar (GBP/AUD) Exchange Rate Focused on Brexit and Australian Data
Markets still predict that a Brexit deal can be reached in the coming weeks. For now, Brexit hopes are keeping the Pound to Australian Dollar exchange rate outlook higher.
However, if UK and EU officials fail to reach an agreement on Brexit any time soon, fears of a no-deal Brexit could return and the Pound outlook may tumble.
While Brexit developments will remain the focus for the Pound, the Australian Dollar outlook could be driven by key upcoming Australian data.
Tomorrow’s Asian session will see the publication of Australia’s October job market report. Following today’s underwhelming Australian wage growth data, poor job market data could worsen concerns about Australia’s economic outlook.
If Australian data disappoints, the Pound to Australian Dollar exchange rate is even more likely to end the week higher, even if there are no Brexit developments.