The Pound Australian Dollar (GBP/AUD) exchange is steady today in today’s session.
The risk-sensitive ‘Aussie’ has suffered from growing tensions between the West and China.
At the time of writing the pair are currently trading at around AU$1.7971 as the Pound is supported by better-than-expected unemployment data from the UK.
Pound (GBP) Edges Higher as UK Unemployment Rate Falls
The Pound rose today after the ONS reported that the UK unemployment rate fell to 5% in January.
Jai Malhi, global market strategist at J.P. Morgan Asset Management commented on the data:
‘Today’s strong labour market report has shone a light on how important the Chancellor’s furlough scheme has been at preventing job losses and keeping the UK on the road to recovery.’
‘The Chancellor will now be hoping the vaccine proves to be the vehicle that takes us across the bridge that he’s helped to build, to the other side of the virus, and that the strength in jobs leads to a speedy rebound in economic activity in the second half of the year.’
GBP investors are becoming increasingly optimistic surrounding the recovery of the UK’s economy as the reopening from lockdown restrictions nears.
However, the row between the UK and EU over the bloc’s threat to ban exports of the AstraZeneca coronavirus vaccine has limited the Pound during today’s session.
Australian Dollar (AUD) Struggles as Global Risk-Off Mood Dampens ‘Aussie’ Sentiment
The Australian Dollar has been struggling today as a global risk-off mood pushes investors to sell-out of the risk-correlated ‘Aussie.’
Tensions between the West and China continue to escalate after the EU imposed sanctions against China for human rights abuses.
In a statement released on Monday, the U.S. secretary of State as well as the foreign ministers of Canada and the United Kingdom said:
‘China’s extensive program of repression includes severe restrictions on religious freedoms, the use of forced labour, mass detention in internment camps, forced sterilisations, and the concerted destruction of Uyghur heritage.’
As a result, demand for the risk-correlated Australian Dollar has been limited.
Moreover, investors are concerned that the ongoing tensions between the West and China could push the ‘Aussie’ down further.
Pound Australian Dollar Exchange Rate Outlook: Flash PMIs in Focus
Pound investors will be awaiting tomorrow’s release of the flash Markit PMI data for March.
The releases will give an indication into how the UK’s economy is performing during lockdown.
A modest growth expected in the services sector could push the Pound higher.
Tomorrow sees the release of UK inflation for February which is forecast to have edged higher, proving GBP-positive.
Australian Dollar traders will be looking towards PMI data from Australia released overnight which could add some support to AUD.
In addition, the Pound Australian Dollar exchange rate will also be driven by any further coronavirus developments.