The affect that this has had on the strength of the Australian dollar has been somewhat mixed on different currency pairings. The AUDGBP exchange rate has fallen over the last couple of days to day’s 0.54 mid-market level. This is a 9 week low for the pairing, or a 9 week high for clients transferring Pounds into Australian dollars not seen since 11th June. AUD to EUR exchange rates have bumped up 0.5 cents since yesterday but remain relatively unchanged over the last week having not moved out of the 1 cent range of 0.60.
This is now creating a reverse U-shape within the AUDGBP and AUDEUR rates since April as both pairings have peaked in both June and July respectively and are now starting to see Sterling and the Euro rally against it over the past month.
The Australian dollar to US dollar exchange rates have also dropped a cent over the past two days to the current 0.71 at time of writing. Despite this the currency pairing has been making inroads against the USD since April. However, the gains do appear to be tapering off over the past few weeks though and could be a sign that Australia still has lingering economic difficulties as the other currency’s countries do not have national lockdowns in place at the moment.
Reduced Cases for Victoria Despite Probing Investigation Over Virus-Ridden Cruise Ship
Positive news emanates out of Australia this morning following the announcement that the state of Victoria, which had seen large spikes in Coronavirus cases earlier this month, has now seen the lowest increase in cases for over a month. The night-time curfew that was imposed on 3rd August looks to have made a successful impact on reducing admissions and brings some confidence back into the Australian markets. Although the state still has over 7,200 cases and remains the Government’s top concern, it is another step in the right direction before they lift the current lockdown restrictions as their death toll has now risen to 438 according to the BBC.
The news comes after recent investigation findings saw that some virus-infected passengers on the 2,600 seat cruise ship, the Ruby Princess, dock and vacate the ship in Sydney back in March, with protocols such as temperature-testing by government officials not implemented, resulting in a rise in COVID-19 infections and deaths at approximately 1,000 cases and 28 deaths respectively.
Mixed Certainty for Australia’s Hopes for COVID-19 Vaccine
Australia’s first vaccine deal for the pandemic has been brokered this week as it had bought out reserves from Pharmaceutical company AstraZeneca and Oxford University which would allow them to manufacture the vaccine next year and make it available freely to 25 million Australians. Whilst this news brings some certainty for the Australian dollar into terms of sentiment and clarity for next year, Australian PM Scott Morrison has U-turned on his decision to make the vaccine mandatory. It is now voluntarily or out of a medical necessity to take it and how that may affect the number of cases and deaths from the outbreak leading into next year could create some strain for the Australian dollar’s strength.
Little Economic Data From AUD Means Most Volatility Caused by Pandemic Updates
From an economic data standpoint, the antipodean currency received a slight bump for its increasingly positive Retail sales figures for July as it came in 0.6% better than June’s 2.7%, at 3.3% suggesting the optimistic figures that Australia is providing at the moment. However, next week will not see any significant releases for AUDGBP or AUDEUR, and could well be driven by differences in other currencies. For instance, USD has its durable goods orders for July alongside its revised GDP Q2 release which previously was predicted to fall in at a slump of a 32.9% contraction to an anticipated -32.5%. This release on Thursday could get the AUDUSD rates back up and running and continue the inroads made over the past few months.
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