Pound to Australian Dollar (GBP/AUD) Exchange Rate Gains as Vaccine Hopes to Push-Start Economy

The Pound to Australian Dollar (GBP/AUD) was gaining this morning with the pair currently trading around $AUD 1.7544.

Pound (GBP) Supported by Vaccine Rollout across the UK

The Pound (GBP) was supported this morning as GP surgeries in England will begin administering the Oxford/AstraZeneca coronavirus vaccine today as the UK races to protect its most vulnerable from the disease.

It is hoped that more than 700 sites will be delivering vaccines by the end of the week, and 7 mass vaccination sites opening across the country.

The health secretary, Matt Hancock has said he is “delighted” care home residents will begin to receive the first of their Oxford/AstraZeneca Covid-19 vaccination this week.

In UK economic news, today saw the release of the final Construction PMI for 20202, which fell below forecasts to 54.6, though still a growth in the sector.

Tim Moore, the Economics Director at IHS Markit, was upbeat about the UK’s construction sector, saying:

‘December data illustrated a positive end to the year for the UK construction sector, mostly fuelled by a sharp rebound in house building. Overall output growth has slowed in comparison to the catch-up phase last summer, but now it is encouraging to see the recovery driven by new projects and stronger underlying demand.’

Australian Dollar (AUD) Exchange Rate Volatile due to US Protests

The Australian Dollar (AUD) has mixed movement today, as the currency correlated to trade and risk-sentiment has been driven by this week’s developments in global politics and the coronavirus pandemic.

Yesterday evening, chaos broke out in Washington DC, USA as Trump supporters stormed the Capitol in protest of the US election result, leaving four people dead.

The mob, encourage by US President Donald Trump who has praised the group, was eventually put to an end by police and the National Guard, though violence continued on the streets after the imposed curfew in the city.

As Congress certified Biden’s win this morning after the chaos that had ensued, markets have begun to calm again.

Furthermore, disappointing trade surplus data from Australia did little to support the currency.

Trade decreased to AUD5.02 billion missing market forecasts of an AUD6 billion surplus. This was the smallest trade surplus since August, amid increasing Covid-19 cases in the country.

Pound to Australian Dollar (GBP/AUD) Exchange Rate could Lose Traction

Pound (GBP) investors will continue to keep an eye on any Covid-19 developments, any indication that the national lockdown is not helping to curb infections or the vaccine rollout is unsuccessfully implemented could concern Sterling.

Australian Dollar (AUD) traders will be focused on the US political situation, if markets continue to settle, traders are expected to take more risks in buying the ‘Aussie.’

Furthermore, ‘Aussie’ investors will be hoping for continued optimism over the economic recovery from the Covid-19 pandemic.

Georgina Clissold

Contact Georgina Clissold