The Pound Australian Dollar (GBP/AUD) exchange rate is weakening this morning as the Australian Dollar finds fresh support from a better-than-expected employment data from Australia.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.7792 as the Pound struggles to find any support heading into the weekend.
Pound (GBP) Weakens Despite UK Local Coronavirus Cases Dropping to 7-Month Low
The Pound could find little support this morning as its weakness against the Euro and US Dollar pushes the currency to further lows against the Australian Dollar.
Despite positive coronavirus data from the UK showing that all local coronavirus case rates across the UK have dropped below 100 cases in 100,000 people for the first time since the start of September.
A reminder that the strict national lockdown paired with vaccine rollout has helped to flatten the curve and allow the country to reopen, slowly but surely.
However, an increase in the South African variant of the virus has caused some concerns for Pound investors.
Professor Kevin Fenton, PHE’s regional director in London, spoke to UK radio this morning, saying:
‘[It is] a low prevalence, a low number of cases. And in addition, we’re surging to identify additional cases belonging to the south London cluster, which we’re investigating in Lambeth, Wandsworth and Southwark. So we’re doing this very proactively.’
Investors worry that if the cases cannot be contained England’s lockdown easing could be delayed and cause the Pound to weaken further.
Australian Dollar (AUD) Supported by Positive Employment Data from Australia
The Australian Dollar is being supported against the Pound this morning following on from better-than-expected employment change data from Australia for March.
Australia’s employment rate surged in March, beating forecasts of 20k and instead coming in at 71k, as the jobless rate fell to 5.6%.
Matthew Bunny, an economist at St.George Economics in Sydney commented on the sharp growth:
‘Australia’s economic recovery has consistently outperformed expectations over the past year. And today’s employment data is no exception, with a very strong print which comfortably beat forecasts.’
The Reserve Bank of Australia continues to expect a robust recovery from the effects of the coronavirus pandemic in the coming months, and have maintained their current monetary policy stance, saying that ‘economic recovery is well underway, stronger than had been expected.’
The risk-sensitive ‘Aussie’ continues to capitalise on the US Dollar’s weakness today, as investors head to riskier currencies.
Pound Australian Dollar Exchange Rate Outlook: Coronavirus Developments in Focus
In absence of any notable data, Pound investors will instead focus on any coronavirus developments from the UK.
As more cases of the South African variant of the virus are discovered, investors will be hoping that these variants will not delay England’s lockdown easing.
Australian Dollar traders will be keeping an eye on key data released from China overnight including GDP, industrial production and retail sales which could affect market risk appetite.
For Australian Dollar traders, movement will also continue to be driven by the global market mood, as the US awaits fresh retail sales data which could cause a rebound in the US Dollar and see the ‘Aussie’ heading lower.