The Pound to Australian Dollar (GBP/AUD) exchange rate is climbing this morning. Investors are buying the Pound amid hopes that a Brexit deal could be reached soon.
Still, the Australian Dollar is fairly appealing as well. More positive coronavirus vaccine news from British drugmaker AstraZeneca, which boosted demand for currencies correlated with risk and trade like the Australian Dollar.
Last Week: Brexit Hopes Keep GBP/AUD Buoyant
At the beginning of last week, the Pound briefly dipped as risk-sentiment surged. However, before long market optimism around the Brexit process once again left the Pound resilient.
Investors kept a hold of the Pound throughout the week amid Brexit expectations. UK and EU officials continued to show optimism around negotiations, so hopes for a deal to be reached sometime this month persisted.
GBP/AUD could have risen even higher last week, but strong Australian job market and retail data kept the Australian Dollar resilient.
Three Things to Watch For This Week
- Brexit Developments
Some are calling the coming week the ‘final push’ for UK-EU Brexit negotiations. If there is optimistic Brexit news, the Pound could climb and some of its downside risk could evaporate.
2. Coronavirus Developments
If major economies continue to show that they will struggle with the coronavirus pandemic through the winter, risky trade-correlated currencies like the Australian Dollar could see limited demand.
3. Upcoming Data
The coming week will be quiet for data. UK distributive trades data on Tuesday and UK Budget news on Wednesday could be influential.
GBP/AUD Outlook
Ahead of a potentially pivotal week for the fate of the Brexit process, the lack of noteworthy data due for publication this week may not matter too much. GBP/AUD will be driven by political and coronavirus news.