The Pound to Australian Dollar (GBP/AUD) exchange rate found its gains limited throughout this morning as global risk-on trade increases.
At the time of writing the pair are currently trading around AU$1.1784.
Pound (GBP) Investors Optimistic Over UK Lockdown Restriction Easing
The Pound finds continuing support from the success of the UK’s coronavirus vaccine rollout and potential easing of lockdown restrictions in the coming weeks.
Investors are becoming increasingly optimistic that the UK economy will begin to recover imminently as some lockdown restrictions could be eased as soon as next week, with schools poised to return on the 8th of March.
Speaking at a press conference yesterday evening, Prime Minister Boris Johnson spoke on both the vaccine rollout and the journey ahead:
‘Next week I’ll be setting out a roadmap saying as much as we possibly can about the route to normality, even though some things are very uncertain. Because we want this lockdown to be the last and we want progress to be cautious but also irreversible.’
‘I’m very hopeful that we’ll be able to go ahead and open things up, but to say I can give an absolute cast iron guarantee that we won’t face further difficulties and have to think harder and deeper about some problems, no at this stage I can’t.’
Australian Dollar (AUD) Loses Traction as US Dollar (USD) Recovers
The Australian Dollar has fallen this afternoon as the recovery of the US Dollar undermines the currency.
The US Dollar has recovered as US Treasury yields have risen, which have pushed up the Dollar, and caused investors to sell-out of the risk-correlated ‘Aussie.’
Furthermore, Reserve Bank of Australia (RBA) minutes published from the last meeting reiterated a dovish tone surround the economic recovery of Australia.
AUD has found support as Australia announces that the AstraZeneca vaccine is safe to be rolled out across the country, and vaccinations can begin.
The vaccine will also be manufactured in Australia, adding to economic activity in the country.
Pound to Australian Dollar Outlook: UK PMI and Inflation Data in Focus
Pound traders will be looking towards tomorrow’s year-on-year inflation data release from January which is forecast to be at 0.6%, the same as December’s inflation rate, which could weigh on GBP movement.
Both Pound and Australian Dollar investors will be looking towards key PMI data releases in the second half of the week, which could paint a better picture regarding the state of both the UK and Australia’s economy at the start of 2021.
The GBP/AUD exchange rate will also be driven by any coronavirus developments, with an increase in global risk-sentiment and continued vaccine rollouts adding further support to AUD.