GBP/AUD Exchange Rate Rangebound as UK Covid-19 Trend Heads in ‘Wrong Direction’
The Pound to Australian Dollar (GBP/AUD) exchange rate held steady today, with the pairing currently trading around AU$1.769.
Sterling struggled to gain against the Australian Dollar (AUD) this morning as fears of a second lockdown continue to haunt British markets. Top UK scientists have warned that the nation is facing a ‘critical point’ for Covid-19.
One of Britain’s top government scientists, chief medical officer Chris Whitty, warned:
‘The trend in UK is heading in the wrong direction and we are at a critical point in the pandemic.
‘We are looking at the data to see how to manage the spread of the virus ahead of a very challenging winter period.’
The Pound (GBP) could continue to fall today if today’s UK scientists televised appeal ahead of the ‘challenging winter’ paints a gloomy outlook for the British economy. If lockdown restrictions are intensified across the country, then Sterling would suffer.
In UK economic news, yesterday saw the release of September’s Rightmove House Price Index. The rose from -0.2% to 0.2% as buyers sought out larger properties following the coronavirus lockdown.
Analysts at Reuters were pessimistic, however, saying:
‘But with unemployment set to rise sharply later this year with the closure of the government’s furlough scheme, and the end of a tax break on property purchases in April 2021, the outlook for the housing market next year looks tougher.’
Australian Dollar (AUD) Steady as Australia’s Covid-19 Inflection Rates Drop to Monthly Lows
The Australian Dollar (AUD) held steady against the Pound (GBP) following reports that Australia could be set to see a record low in daily coronavirus increases for three months.
Consequently, ‘Aussie’ investors have become more optimistic about the nation’s economic recovery.
The state of Victoria – the epicentre of the nation’s coronavirus outbreak – recorded just 14 new infections to Sunday, with the figure down from 21 on the day before.
Victoria’s Premier Daniel Andrews said that the recent data was a cause for great optimism’.
Australia’s Prime Minister Scott Morrison was also optimistic about the situation in Australia’s state of Victoria.
Melbourne has also started to ease its Covid-19 restrictions. As a result, this has buoyed the ‘Aussie’ as Australia continues to make progress.
GBP/AUD Forecast: Could a Dovish Bank of England Drag Down Sterling?
Australian Dollar (AUD) investors will be awaiting tomorrow’s speech from the Reserve Bank of Australia’s Assistant Governor, Guy Debelle. Any dovishness from the bank would prove AUD-negative.
Tomorrow will also see the release of the flash Australian Commonwealth Bank Manufacturing PMI. If this rises, then the ‘Aussie’ would head higher as the nation’s largest sector improves. On the other hand, any decrease would drag on optimism in Australia’s economy.
Sterling traders will be keeping a close eye on tomorrow’s speech from Andrew Bailey, the Governor of the Bank of England (BoE). If he is notably concerned about Brexit’s impact on the British economy, then the GBP/AUD exchange rate will fall.