Pound to Australian Dollar (GBP/AUD) Exchange Rate Rangebound on back of Coronavirus Gloom

The Pound to Australian Dollar (GBP/AUD) exchange rate was largely unchanged this morning as the coronavirus pandemic continues to dictate markets.

The pair is currently trading around $1.7580.

Pound (GBP) on the Offensive as Vaccine Rollout Appears to be Successful

The Pound (GBP) remained on the offensive this morning as the coronavirus vaccine rollout continues to be implemented across the UK.

Speaking at a Downing Street press conference the Health Secretary, Matt Hancock, said that more than 2.6 million coronavirus vaccine doses have now been given.

Reminding the public that a vaccine is not a ‘free pass’ the Health Secretary went on to say:

‘I know there has been speculation about more restrictions, and we don’t rule out taking further action if it is needed, but it is your actions now that can make a difference.’

‘Stay at home, and please reduce all social contact that is not absolutely strictly necessary. That’s what is needed: act like you have the virus.’

This comes as ministers are discussing how to achieve a greater enforcement of social distancing, with tighter restrictions being considered, which could further upset the UK economy.

However, BoE Governor Andrew Bailey’s comments about negative interest rates. He struck a cautious tone and described them as ‘controversial’, which has boosted GBP.

Australian Dollar (AUD) Remains Defensive as Additional US Stimulus Expected

The Australian Dollar (AUD) remained defensive this morning despite the bullish sentiment around global financial markets provided a boost to the risk-correlated ‘Aussie’.

Following the Democratic win in the US Senate runoff elections in Georgia, investors are expecting a larger fiscal stimulus for US citizens.

Furthermore, Australia’s relationship with China has worsened this week as Australia blocked the Chinese takeover attempt of a local building contractor.

This could put pressure on the ‘Aussie’ as China could retaliate with further trade bans against the country.

The Australian Dollar has received some support from Chinese equity markets hitting a 13-year high supporting the risk-sensitive AUD.

Pound to Australian Dollar (GBP/AUD) Outlook: Coronavirus Looms as NHS waits for Full Benefit of Lockdown

For Pound (GBP) investors, any coronavirus developments will remain in focus, any signs of improvement in Britain’s situation through the vaccine rollout or falling infection rates could soften UK economy concerns which would prove GBP-positive.

Australian Dollar (AUD) traders will be looking to any further developments in US politics and fiscal stimulus.

Furthermore any further tensions with China could push down the ‘Aussie’ further.

Georgina Clissold

Contact Georgina Clissold