GBP/AUD Exchange Rate Rangebound as Brexit Hopes Return
The Pound to Australian Dollar (GBP/AUD) exchange rate held steady this morning, with the pairing currently fluctuating around AU$1.829.
Sterling (GBP) failed to gain on the Australian Dollar (AUD) today despite the announcement that post-Brexit trade negotiations would be extended until this Wednesday.
Leo Varadkar, Ireland’s deputy Prime Minister, was positive about the extension, telling RTE radio:
‘It’s by no means guaranteed but I think on the balance of probabilities it will be possible to agree a free trade agreement with the UK which means there will be no quotas and no tariffs.’
Consequently, the Pound (GBP) has held relatively steady against many of its peers.
With social care secretary Matt Hancock expected to announce further Tier 3 restrictions, GBP investors are remaining cautious, however. These will most likely affect Nottingham and Warrington.
Mr Hancock told BBRC Radio 3’s Today programme:
‘The first thing that’s most important is that the case rate has to be coming down, and in particular we look at the number of cases amongst the over-60s because that’s the number that is likely to translate into hospital admissions and sadly into deaths.’
Australian Dollar (AUD) Weighed Down by Rising Global Covid-19 Cases
The Australian Dollar (AUD) has benefited from news that a Covid-19 vaccine could arrive earlier-than-expected. But rising global cases of Covid-19 has also limited the appeal for the risk-averse ‘Aussie’.
The UK’s AstraZeneca announced this morning that the Covid-19 vaccine it is developing with Oxford University had produced immune responses in both the elderly and young adults.
Demand for the risk-averse ‘Aussie’ has risen on hopes that a Covid-19 vaccine could stall the economic impact of the pandemic.
A spokesman for AstraZeneca told Reuters:
‘It is encouraging to see immunogenicity responses were similar between older and younger adults, and that reactogenicity was lower in older adults, where the Covid-19 disease severity is higher.’
AUD’s gains are however being clipped by the news of rising Covid-19 in China.
With China being Australia’s largest trading partner, this has sparked concern for Australia’s economy in the months ahead.
Consequently, the AUD/GBP exchange rate remains steady as the outlook for Australia’s economy still remains largely uncertain.
GBP/AUD Forecast: Could a Brexit Deal Compromise Boost Sterling?
Australian Dollar (AUD) investors will be awaiting tomorrow’s speech from the Reserve Bank of Australia’s (RBA) Assistant Governor, Michele Bullock.
Any downbeat comments about a potential rate cut next month would prove AUD-negative.
Pound (GBP) traders will be eyeing Brexit developments this week.
We could see the GBP/AUD exchange rate head higher on any further signs that indicate a possible post-Brexit trade deal.