The Pound to Australian Dollar (GBP/AUD) started the week muted as coronavirus continues to dictate the Sterling.
The pair is currently trading around $1.7498.
Pound (GBP) Subdued as UK Braces for ‘Worst Weeks of Pandemic’
The Pound (GBP) found little meaningful gains this morning as England’s chief medical officer, Professor Chris Whitty, warned that the coming weeks would be ‘the worst weeks’ of the second wave of the coronavirus pandemic.
Professor Chris Whitty went on to say that life returning to normal is still ‘a long way away.’
Speaking to BBC Breakfast he said:
‘I am confident we will go back to life as it was before at some point, that’s not in doubt, that’s the life we all want to lead.’
‘People will be able to have the restrictions lifted. It won’t happen in one go, and at a certain point, hopefully you’ll get back to a life that is basically exactly the same as it was before.’
Furthermore, vaccines minister Nadhim Zahawi was unable to assure that the current “tough” lockdown restrictions are enough to combat the rising infections, any introduction of tighter restrictions are likely to have a greater, negative impact on the UK economy.
Speaking to BBC Radio 4’s Today programme he said:
‘We don’t want to use tougher measures, the lockdown is tough, schools are shut, but it is important to remember this virus loves social interactions.
Australian Dollar (AUD) Supported by Retail Sales Figures
Retail sales in Australia rose by 7.1 percent in November 2020, compared with an initial estimate of a 7.0 percent growth and after a 1.4 percent increase a month earlier.
This was the fastest gain in retail trade since May, boosted by the reopening of retail stores in Australia following the easing of coronavirus restrictions.
However, recent developments in China have negatively affected the risk-sensitive ‘Aussie’ as the country imposes strict anti-virus measures in the Hebei province as coronavirus cases are on the rise.
If the virus spreads to other regions of China, commodity markets will find themselves under increasing pressure.
‘Aussie’ investors will continue to monitor the coronavirus situation in China.
Pound to Australian Dollar (GBP/AUD) Outlook: BoE Speech in Focus
Pound (GBP) investors a main focus will today will be Bank of England’s (BoE) Silvana Tenreyro’s speech today on the international evidence on negative interest rates.
Previously, she has indicated an openness to supporting a cut in interest rates below zero, which is likely to be seen as GBP-negative as it would see investors get less returns on Sterling
Any new Covid-19 developments regarding vaccine rollouts or infection rates will also remain a key aspect.
For Australian Dollar (AUD) investors a main focus will be the continuing deterioration in market sentiment due to rising coronavirus cases around the globe which could negatively impact the risk-sensitive ‘Aussie’ further.