The Pound to Australian Dollar (GBP/AUD) exchange rate has been steadily gaining since markets opened this morning. The latest lockdown easing measures are supporting optimism surrounding the UK’s economic recovery.
At the same time, AUD exchange rates have been struggling after Chinese retail sales data missed forecasts.
Last Week: UK Economic Recovery Optimism Bolsters Sterling
The Pound rose steadily against the Australian Dollar last week as economic optimism surrounding the UK’s recovery from coronavirus kept Sterling higher against many of its rivals.
The risk-correlated Australian Dollar weakened during the middle of last week as the latest inflation data from the US soared higher than expected, causing market sentiment to sour on concerns that the Federal Reserve may raise interest rates sooner than it has previously indicated.
The GBP/AUD pairing ended the week on a high note despite some investors becoming worried that the Indian variant of the coronavirus could delay the UK’s roadmap out of lockdown.
Three Things to Watch for This Week
- UK Employment Data
The latest UK employment data is expected to show the unemployment rate remained relatively steady in March during tight coronavirus restrictions, which could support GBP if the data shows the UK economy weathered the national lockdown.
- Australian Consumer Confidence
Wednesday will see the release of the latest Australian consumer confidence index for May which is forecast to have dipped slightly. However, the reading does remain higher than before the coronavirus pandemic as optimism remains strong.
- UK Inflation Rate
Wednesday will also see UK inflation rate data for April which is expected to have increased to 1.4% as household energy bills rise along with higher global oil prices, potentially boosting Sterling.
GBP/AUD Outlook
This week’s economic calendar is busy for both the UK and Australia which could see significant movement driven by the latest data releases. The global market mood and any further coronavirus developments will also drive the GBP/AUD pairing.