Pound to Australian Dollar Exchange Rate Slips but Remains Strong
Update 16:49 GMT 11/11/2020:
The Pound Sterling to Australian Dollar exchange rate has slipped slightly from its best levels this afternoon.
At the time of writing, GBP/AUD trends near the interbank level of 1.81. This still puts it well above the week’s opening levels.
The Australian Dollar (AUD) remains appealing overall due to the market’s improving sentiment this week. Still, the Pound (GBP) is holding most of this week’s gains due to optimism over coronavirus vaccine news.
Tomorrow’s UK data could further boost the Pound if it impresses. The focus for GBP/AUD is likely to be Brexit developments over the coming week.
(Originally published 10:34 GMT 11/11/2020)
Pound to Australian Dollar Exchange Rate Holding Yesterday’s Advances on Improved Sentiment
Hopes for the Brexit process to bear fruit are keeping the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate trending on the up today. The Australian Dollar (AUD) is struggling to perform better as it slips back from highs in profit taking.
It’s been a tumultuous week for GBP/AUD. Last week saw the ‘Aussie’ benefit from market risk-sentiment and GBP/AUD fell from the interbank level of 1.84 and lost over three cents.
After opening this week at the level of 1.81, GBP/AUD briefly dipped to a low of 1.79 before rebounding and recovering a cent. At the time of writing on Wednesday, GBP/AUD trends near the interbank level of 1.82.
Sterling (GBP) investors continue to focus on the Brexit process. There are expectations that the UK and EU will reach an agreement on trade sometime this month.
Pound (GBP) Exchange Rates Resilient as Markets Hope for Brexit Developments
The Pound (GBP) has been advancing since yesterday. After mixed movement at the beginning of the week, coronavirus vaccine and Brexit hopes boosted demand for the British currency.
Pfizer announced major progress in vaccine trials yesterday. The company indicated that its coronavirus trials were having effective and safe results.
It boosted market hopes that there would be a light at the end of the coronavirus tunnel. Bets of a vaccine distribution combined with economic rebound in the first half of 2021 rose.
As Britain’s economy has been hit hard by the pandemic, the news was seen as especially UK positive.
Investors are also more hopeful for some kind of Brexit deal to be made as focus returns to UK-EU Brexit negotiations. UK and EU officials have both maintained optimism that a deal can be reached soon.
Australian Dollar (AUD) Exchange Rates Slip from Best Levels after Vaccine Rally
The Australian Dollar (AUD) saw strong performance last week, and at the beginning of this week.
As a currency correlated to risk and trade sentiment, it saw a surge in demand amid hopes for a clear US 2020 Presidential Election result. Then, when markets opened this week, its rally was extended by hopes for a coronavirus vaccine from Pfizer.
However, Australia has already been perceived as weathering the coronavirus pandemic fairly well. While the vaccine news did boost risk-sentiment, it ultimately was good news for economies hit hardest by the pandemic.
As a result, the Australian Dollar has been less appealing over the past day. Investors are selling the ‘Aussie’ back from its best levels in favour of currencies like the Pound (GBP) amid vaccine hopes.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Could See Further Brexit Gains
Sterling (GBP) is holding its ground as markets focus back on the Brexit process. However, if there are actually optimistic developments in Brexit, the Pound could be in for even further gains.
There is speculation that there could be progress on a Brexit deal as soon as next week. Officials and markets expect a deal will be reached by the end of the month, meaning Brexit is likely to only see more and more focus.
As a result, Brexit focus could overshadow tomorrow’s upcoming UK growth and production results. These figures could support the Pound if they impress though, especially amid coronavirus vaccine hopes.
As for the Australian Dollar (AUD), it may struggle to advance again without fresh impetus.
The Australian Dollar could benefit from higher market sentiment on coronavirus and political hopes. However, these factors could also benefit the Pound.
Overall, the Pound to Australian Dollar (GBP/AUD) exchange rate could be driven by data and Brexit developments as markets calm from the latest political panics.