GBP/AUD Exchange Rate Falls as Covid-19 Vaccine Hopes Buoy Aussie
The Pound to Australian Dollar (GBP/AUD) exchange rate fell by -0.3% today, with the pairing currently trading around £1.79.
The Australian Dollar (AUD) benefited from hopes over a coronavirus vaccine today, with reports announcing that China may be on the road to developing a vaccine.
This follows news that Sinopharm, a Beijing group affiliated with the China National Pharmaceutical Group, had achieved positive results on a Covid-19 vaccine candidate.
Tao Lina, a Shanghai-based vaccine expert, was more cautious, however:
‘Each person needs two doses of the inactivated vaccine to evoke an immune response, and 200 million doses would only meet the immunization needs of 100 million people. This is still far from enough for China and the world at a time when vaccines are urgently needed.’
However, some ‘Aussie’ investors are becoming more cautious after today saw the biggest daily rise in coronavirus cases in two months.
This follows data from Australia’s second most populous state, Victoria, where 75 new cases, increasing Australia’s number of cases to 85 in 24-hours.
Meanwhile, Prime Minister Scott Morrison has urged states to continue easing lockdown restrictions and has insisted that country nation’s economy must be revived.
Nevertheless, ‘Aussie’ investors are becoming more optimistic that the global economic situation could improve in the coming months. Any further hopes of a Covid-19 vaccine would also prove AUD-positive.
Pound (GBP) Dips as Mortgage Approvals Drop in May
The Pound (GBP) dipped today after it was revealed that UK mortgage approvals slumped as Covid-19 wracked the British economy. Mortgage approvals for house purchases fell to just 9,300 in May, down from April’s 15,800.
Ross Counsell, chartered surveyor and director at Good Move, was optimistic about the future, however:
‘Long-term we expect to see a boost in the property market across the UK alongside a lift in mortgage and re-mortgage approvals. However, it’s important to note that this is thoroughly dependent on the government’s continuing plans to support people’s jobs and household income.’
Prime Minister Boris Johnson was notably dovish about the coronavirus’ effect on Britain, calling it both nightmarish and a ‘disaster’. Consequently, GBP investors have remained wary as the UK is yet to show signs of recovery from the pandemic.
GBP/AUD Outlook: Brexit Talks in Focus
Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of June’s AiG Performance of Manufacturing Index. Any improvement in Australia’s largest sector would prove AUD-positive.
Tomorrow will also see a speech from the Reserve Bank of Australia’s Guy Debelle. However, any dovishness from the RBA would weigh on the ‘Aussie’.
AUD will remain sensitive to risk sentiment this week.
As a result, we could see the GBP/AUD exchange rate begin to edge higher on fears of a second wave of the coronavirus dragging on the global economy.
The GBP/AUD exchange rate will remain sensitive to Brexit developments this week. Any signs of UK-EU talks breaking down would drag Sterling down further.