The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate briefly attempted recovery this morning. However, the gains were limited as Britain’s coronavirus infection rate remains near its highest levels.
Despite being weakened a little by US fiscal stimulus hopes, the Australian Dollar continues to trend near highs against the Pound. Optimism that some economies will rebound from the pandemic is keeping market sentiment buoyed.
Last Week: GBP/AUD Falls to New 2-Year-Worst
Investors sold the Pound at the beginning of last week, in reaction to news that Britain would be sent into a third national lockdown.
Despite concerns about US political stability amid a mob riot in the US Capitol attempting to overthrow the US election results, the Australian Dollar remained appealing throughout the week.
GBP/AUD continued to fall as the ‘Aussie’ capitalised on a weak Pound. Expectations for a global coronavirus recovery boosted AUD demand.
Three Things to Watch For This Week
- Coronavirus Developments
Britain is still looking to lower its coronavirus infection rate. It has been rumoured that even stricter restrictions are possible if the current lockdown is not doing enough to limit numbers.
2. Australian Housing Data
The only notable Australian data due later in the week is building permits on Thursday and home loans on Friday. If they beat expectations they could boost ‘Aussie’ support.
3. UK Growth Rate
Britain’s November growth rate report will be published on Friday. It will come alongside UK trade and production stats and could influence the Pound’s late-week movement if it surprises investors.
Investors are hesitant to buy the Pound to Australian Dollar as Britain’s coronavirus situation remains gloomy. The Australian Dollar could weaken if markets start to avoid risk-taking more however.