The AUD to GBP exchange rate sold off yesterday and the pound could see further gains on its vaccination campaign. The Aussie has been strong since early-December against the pound and has recently testing the 2020 highs near 0.5730. The latest move lower could signify a larger correction is ahead in the pair.
AUDGBP was trading just below 0.5700 on Tuesday with the first support coming in ahead of the 0.5600 level.
UK Vaccination Centres May Tip the Balance to sterling
The UK has struggled since the tail-end of the year as the country was forced into further government lockdowns over the virus. This has weighed heavily on the pound, but the bad news may be priced-in and the currency could rebound on the country’s vaccination plan. to 80k. The UK has opened seven mass vaccination centres in England, whilst the country has also administered 2.6 million vaccines which is more than the whole of Europe combined.
This rollout could tip the scales in the favour of the British pound after the currency suffered losses against the Aussie despite the Brexit deal being signed.
With the gloom already factored into the pound, the latest appearance of the virus in Australia could see profit-taking in the Aussie dollar. Western Australia premier Mark McGowan told reporters that the country “could rest a lot easier” if the virus was eliminated in New South Wales. But there is a trigger-happy desire in other states to lock down and ask questions later despite very low levels of the virus in Australia.
Australia’s border closures have crippled tourism sector during the peak summer season and are being criticized by travel operators. During the two weeks over Christmas and New Year, tourism revenues lower by $3billion compared to last year.
Brexit Seen as an ‘Exciting Chapter’ for the Country
One of Europe’s leading company executives has given the Brexit agreement “vote of confidence” and predicted the economy could see a “rapid bounce-back” this year.
CEO of Spanish telecoms giant Telefonica, Jose Maria Alvarez-Pallete, said the country’s exit from the EU “marks an exciting new chapter in Britain’s history”. Telefonica owns the UK operator O2.
Alvarez-Pallete added that Leaving the union will give Britain a renewed confidence and a chance to lead in the digital revolution.
The remarks are a rare show of optimism for Britain’s exit from the EU but the deal is now signed and the proof will be in the pudding, as they say. Post-Brexit figures will begin to emerge for the UK and eyes will be on trade. Friday will see the release of Gross Domestic Product (GDP) updates for November but the numbers are likely to be clouded by the lockdowns imposed by the UK government around that time.
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