Pound Australian Dollar Exchange Rate Rises despite Lack of UK Data
The Pound Australian Dollar (GBP/AUD) exchange rate strengthened this afternoon following a slight dip around lunchtime, as a risk-off mood impacted the Australian Dollar (AUD) disproportionately. Yesterday’s dovish decision from the Reserve Bank of Australia (RBA) also weighed upon AUD.
At the time of writing, GBP/AUD is trading at A$1.8684, slightly up from today’s opening levels.
Australian Dollar (AUD) Slips on USD Strength, Dovish RBA Decision
The Australian Dollar has fallen today against the majority of its peers, as growing risk-aversion draws support away from risk-on currencies. The safe-haven US Dollar (USD) found renewed strength, supported by imminent tapering expectations – which depressed other currencies by comparison.
Risk sentiment was exacerbated by spiking cases of the Covid Delta variant internationally. In Australia, tensions between health officials and politicians arise as lockdown easing coincides with stricter rules for truck drivers entering Western Australia.
Queensland’s State Health Minister Yvette D’Ath has accused the federal government of playing ‘cheap politics’ over exemptions for returning soldiers, insisting that ‘not one commonwealth minister has reached out to [Queensland Health] to verify or raise any concerns in relation to ADF personnel…’
Yesterday’s dovish announcement from the RBA also continued to put pressure upon the ‘Aussie’– the central bank kept the cash rate unchanged and confirmed plans to reduce bond buying, but intends to continue with asset purchases until February – a longer period than expected.
Pound (GBP) Firms against AUD on Vaccine Developments
Despite falling against several of its peers today, the Pound (GBP) was able to climb against the Australian Dollar as positive vaccine developments capped Sterling losses.
The UK is expected to reveal its decision on Covid vaccine boosters tomorrow, and will ‘imminently’ publicise guidance on vaccinations for 12-15 year-olds.
Confidence in booster shots has been reinforced as US biotechnology group Novavax begins trials of its Covid-flu combination vaccine, and a top Pfizer scientist disputes claims that the third dose is being rolled out too soon.
Philip Dormitzer, chief scientific officer at Pfizer, defended the company against suggestions it was pressing policymakers into a hasty decision, arguing that ‘If we waited until there [were] widespread breakthroughs of severe disease to advance a solution, we would be way too late.’
Dormitzer also asserted that the creation of a ‘tool’ for the problem that’s coming – the ‘solution ahead of a crisis’ – was Pfizer’s business, while the decision on whether to deploy that tool remained out of their hands.
Pound Australian Dollar Exchange Rate Forecast: Debelle Speech to Inspire AUD Confidence?
Later this evening, RBA policymaker Guy Debelle is due to give a speech, followed by another tomorrow. If Debelle strikes a hawkish tone in relation to the central bank’s policy, the ‘Aussie’ may enjoy tailwinds.
Given a lack of UK data, the Pound is likely to seek trading impetus based upon political developments and the international Covid situation.