While the Pound was once again boosted by UK lockdown easing hopes today, the Pound Australian Dollar (GBP/AUD) exchange rate struggled to advance. This was because of resilience in the Australian Dollar.
The UK government has reconfirmed that more bars and shops in the UK will reopen next week. This indicated that lockdown easing roadmap was still unfolding as planned, keeping markets optimistic about the UK outlook and boosting Sterling.
The Reserve Bank of Australia (RBA) held its April policy decision today. The bank took a relatively upbeat tone overall, and global data has been strong enough to keep market sentiment buoyant. These factors are boosting Australian Dollar strength.
Last Week: Pound Australian Dollar Exchange Rate Strikes 2021 Best
Continued optimism that the UK economy was seeing a smooth and gradual reopening from its third national lockdown kept Sterling broadly appealing last week.
The already strong British currency continued to strike new highs on UK economic recovery optimism. This was made easier by broad weakness in some major rivals like week, including the Australian Dollar.
Concerns of a ‘third wave’ of coronavirus infections and new restrictions in some major economies like France dampened market sentiment. This hurt risk and trade-correlated currencies like AUD throughout the week.
Three Things to Watch For This Week
- Services and Composite PMIs
The biggest news on the UK and Australian economic calendars this week will be service and composite PMI data from March. The data will be the clearest indication yet of how the UK and Australian economies weathered the coronavirus pandemic last month.
- Australian Building Permits
The only other data worthy of note this week will be Australian building permit data, due on Friday. Surprising Australian housing stats could influence AUD movement.
- Coronavirus Developments
With the UK and Australia both expected to continue easing their respective restrictions, any complications in the pandemic or vaccine rollout could also influence the Pound and Australian Dollar.
Amid a quieter week for data, GBP/AUD movement may be a little calmer this week. Investors will await services PMI results and developments around the coronavirus pandemic.