GBP/AUD Exchange Rate Rangebound as US Covid-19 Cases Increase
The Pound to Australian Dollar (GBP/AUD) exchange rate held steady today as the escalating coronavirus crisis eclipsed hopes of a successfully vaccine rollout. The pairing is currently trading around AU$1.816.
The Covid-19 crisis has escalated in the United States with Johns Hopkins University reporting that 250,000 American citizens had now died from the virus, with US infections exceeding 11 million.
Consequently, demand for the risk-sensitive ‘Aussie’ has fallen as the outlook for the US economy – the world’s largest – appears increasingly grim.
In Australian economic news, today saw the release of October’s Unemployment Rate. The report was better than forecast but rose to 7% despite easing Covid-19 lockdowns.
Bjorn Jarvis, the head of Labour Statistics at ABS, was upbeat about the unemployment report, saying:
‘This strong increase means that employment in October was only 1.7 per cent below March, and reflects a large flow of people from outside the labour force back into employment.
‘Encouragingly, the rise in employment was also accompanied by a strong rise in hours worked, particularly in Victoria, where hours increased by 5.6 per cent.’
Meanwhile, AUD traders will continue to monitor global market mood and America’s Covid-19 situation.
If this continues to worsen, however, we could see the AUD/GBP exchange rate fall.
Pound (GBP) Steady on Hopes of UK-Canada Trade Deal
The Pound (GBP) held steady today following reports that the UK and Canada could be on the brink of securing a trade deal.
This has provided some relief as UK-Canada relations had deteriorated over the previous months.
There are no UK economic data releases due out today, with GBP investors instead monitoring UK-EU Brexit developments.
With no clear signs of progress in trade talks between the two sides, UK markets are becoming increasingly jittery.
British accountancy firm KPMG also warned that the failure to secure a post-Brexit trade deal could halve UK growth.
Yael Selfin, the chief economist at KPMG, was however more optimistic about the UK’s coronavirus situation, commenting:
‘We’re hopefully out of the woods when it concerns Covid, but we must still remember the UK is entering another period where there is still going to be some sort of a shock.’
GBP/AUD Outlook: UK and Australian Retail Sales Data in Focus
Australian Dollar (AUD) investors will be awaiting tomorrow’s release of the flash Australian Retail Sales report for October.
If these confirm forecasts and rise by 0.3%, then we could see ‘Aussie’ head higher.
Tomorrow will also see the release of October’s UK Retail Sales data for October, which is expected to increase.
However, with the UK now under lockdown the outlook for Britain’s economy is expected to darken.
Also due to release tomorrow is November’s UK GfK Consumer Confidence report, which is expected to fall to -34.
The GBP/AUD exchange rate will however continue to be driven by Brexit developments.
Any further signs that UK-EU trade talks are failing to agree on a post-Brexit trade agreement would prove GBP-negative.