As Sterling continued to run out of bullishness, the Pound Australian Dollar (GBP/AUD) exchange rate continued to slip from highs today.
Analysts predict the Pound will start to be more pressured by the reality of post-Brexit difficulties as coronavirus vaccine optimism has been largely priced in.
The Australian Dollar steadied this morning, after plunging on market risk-aversion. The ‘Aussie’ is a risk and trade-correlated currency, so it has been weaker as fresh global coronavirus recovery uncertainties rise in markets.
Last Week: GBP/AUD Surges on Risk-Aversion
Despite the Pound’s appeal showing signs of weakening last week, the Pound to Australian Dollar exchange rate still spent the week advancing.
Sterling largely benefitted from weakness in the Australian Dollar. Huge volatility in the Turkish Lira (TRY), as well as concerns for a ‘third wave’ of coronavirus infections across the globe, led investors to seek safe havens over riskier assets.
GBP/AUD touched near its best levels all year at the end of last week. Since then though, the pair has been trending lower.
Three Things to Watch For This Week
- UK Growth Rate Report
Wednesday will see the publication of this week’s most influential dataset. If UK growth from Q4 2020 beats expectations, confidence in the UK economy could rise and Sterling could strengthen further.
- Australian Retail Sales
The most influential data of the week for AUD will be February retail sales results, due for publication on Thursday. Strong retail stats could make it easier for the ‘Aussie’ to resume strong performance.
- Manufacturing PMI
Australian manufacturing PMI is due on Thursday’s Asian session, with UK data following during the European session. Any surprises in these manufacturing sector indexes could influence currency movement.
With key UK and Australian stats due around the middle of the week, the Pound to Australian Dollar exchange rate could be driven by surprising data as well as shifts in market sentiment.