The Australian Dollar (AUD) has firmed a little this morning following last Friday’s losses, which is weighing on the Pound to Australian Dollar (GBP/AUD) exchange rate.
Investors still find the Pound relatively appealing on UK coronavirus vaccination hopes. However, Britain’s economic outlook remains mixed amid concerns that the pandemic is seeing a much worse than feared impact.
Last Week: Weak Australian Retail Stats Shock Markets
Demand for the Pound was broadly mixed last week. The British currency was supported by expectations for ramped up coronavirus vaccinations, but dented by signs of worse than expected economic activity amid Britain’s third national lockdown.
However, the Australian Dollar plunged at the end of the week, as markets expressed shock with the latest Australian retail sales results.
Friday’s Australian retail sales stats fell well short of expectations. While they didn’t impact Australia’s optimistic outlook much, the shock was still enough to cause late-week AUD losses.
Three Things to Watch For This Week
- UK Job Market Report
Tuesday will see the publication of Britain’s November job market report. December jobless claims figures will be published as well.
2. Australian Inflation Stats
Australia’s Q4 inflation rate results will be published during Wednesday’s Asian session. Strong data could boost hopes for Australian economic resilience and soften any expectations for Reserve Bank of Australia (RBA) dovishness.
3. Coronavirus Developments
Of course, developments in the UK and Australia coronavirus pandemic situations will remain key influences for currency movement as well.
GBP/AUD Outlook
The Pound to Australian Dollar exchange rate may not have much drive to advance this week. Unless Britain’s coronavirus situation or data is surprisingly good, the strong Australian Dollar outlook could keep pressure on GBP/AUD instead.