The Pound Australian Dollar (GBP/AUD) exchange rate is gaining this morning following reports that the UK’s GDP beat forecasts and contracted less than expected in the three months leading to February.
At the time of writing the GBP/AUD pairing are trading at around AU$1.8074.
Pound (GBP) Supported by UK GDP Data
The Pound is being supported this morning following the release of the most recent GDP data from the UK in the three months leading to February.
Though the figure remained in contraction, UK GDP rose 0.4% in February as growth was led by production and the construction sector.
Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International was optimistic about the growth:
‘After a sobering start to the year, February’s GDP figures show a rosier picture. GDP returned to growth in the second month of the year, up 0.4%, adding to expectations that the Q1 downturn won’t be as sharp as initially feared.’
‘There is much reason for optimism. Consumers have enthusiastically returned to the high street, glasses have been raised to the opening of outdoor dining and drinking as restrictions ease and the vaccination programme continues at pace.’
The Pound has found further support following England’s second stage of lockdown easing which came into force yesterday, as hopes the economy will rebound with increased retail spending causes investors to remain optimistic.
Australian Dollar (AUD) Undermined by Vaccine Rollout Concerns
The Australian Dollar has found itself undermined by vaccine rollout concerns in Australia and a mixed business confidence index from the country.
National Australia Bank’s (NAB) Business Confidence edged down to 15 in March missing forecasts of 18. The NAB remarked that:
‘Businesses are telling us activity continues to increase at a very healthy rate as we have moved past the rebound phase in activity with the earlier removal of pandemic-related restrictions. Overall, the recovery over the last year has been much more rapid than anyone could have forecast.’
Despite the hawkish comments from the bank, Australia’s economic recovery seems to be dependent on the coronavirus vaccine rollout which so far has been slow and delayed by safety concerns.
The Australian government have also chosen not to buy any of Johnson & Johnson’s one-shot vaccine, saying that the vaccine is similar to AstraZeneca which is no longer recommended to people under 50 in the country.
Australia’s plan to vaccinate its population by October appears to be drifting further away under current delays and issues.
Pound Australian Dollar Exchange Rate Outlook: Australian Consumer Confidence in Focus
For Australian Dollar traders, tomorrow will the release of the Westpac Consumer Confidence Index for April which is forecast to have increased by just over 1 point. If the index meets forecasts, the ‘Aussie’ could find some much needed support.
For Pound traders, a speech from the Bank of England’s Jonathan Haskel could shed some light on the UK’s perceived economic recovery in the coming months.
The GBP/AUD exchange rate will continue to be driven by any further coronavirus developments in the coming days, as Australia continues to struggle to vaccinate its population AUD could see itself continuing to fall.