UK Approval of Moderna Vaccine Offers Pound Australian Dollar (GBP/AUD) Exchange Rate Encouragement
The Pound to Australian Dollar (GBP/AUD) exchange rate held onto a narrow uptrend ahead of the weekend in the wake of news of the Moderna Covid-19 vaccine’s approval for use in the UK.
While the initial order of vaccines looks too small to have any material impact on the UK reaching its target for vaccinating vulnerable individuals by mid-February.
Even so, the prospect of a trio of vaccines seeing rollout across the UK encouraged hopes that the pandemic crisis may be brought under control sooner rather than later, to the benefit of Pound Sterling (GBP).
As the Pfizer vaccine also shows signs of success against the newer, more infectious variants of the virus this encouraged a general sense of market optimism today.
Weak US Jobs Report Fuels AUD Exchange Rate Support
However, the Australian Dollar (AUD) found some renewed support thanks to the underwhelming nature of December’s US non-farm payrolls report.
A surprise decline in the headline payrolls figure highlighted the increasing pressure coming to bear on the US labour market, giving investors incentive to sell out of the US Dollar (USD).
Coupled with growing optimism over the prospect of the incoming Biden presidency this lifted market sentiment, shoring up the risk-sensitive Australian Dollar.
While the global economy recovery appears on track to come later in the year than previously hoped this was not enough to put much of a dampener on GBP exchange rates.
Solid Retail Sales Forecast to Shore up Australian Dollar Demand
Confirmation that Australian retail sales picked up sharply in November could give the antipodean currency a fresh boost on Monday.
Forecasts point towards the finalised sales figure showing 7% growth on the month, pointing towards an increased level of domestic consumer confidence.
Unless the figure sees any negative revision this could leave the GBP/AUD exchange rate struggling to find fresh traction at the start of the week.
Support for the Australian Dollar could also strengthen in response to December’s Chinese inflation rate, given the currency’s common function as a market proxy for sentiment towards the world’s second-largest economy.
GBP/AUD Exchange Rate Strengthen Limited by Thinness of UK Data
With fresh UK data thin on the ground until the end of next week the GBP/AUD exchange rate may return to a weaker footing.
As the UK economic recovery appears increasingly at risk thanks to the latest Covid-19 crisis and lockdown investors may lack much incentive to favour the Pound in the days ahead.
However, if Friday’s raft of trade and production data can demonstrate some signs of resilience this could offer GBP exchange rates a boost.
If November’s industrial production data shows signs of shaking off the impact of the second national lockdown and economic disruption this may help the Pound to recover further ground against its rivals.