AUD to GBP: UK Vaccine Push Boosts Sterling

AUD GBP Lower Ahead of PMI Data for the UK Economy

The AUD to GBP exchange rate was lower by 0.25% on Wednesday as the pound continues to gain from a roll out of coronavirus vaccines. Despite a steady rate of cases, the government is pushing ahead with a vaccination plan that could see numbers dropping and the economy reopened ahead of other countries.

AUDGBP was trading just below 0.5670 and the first target would be the 0.5620 price level.

Aussie Scientists Question Vaccine

As the UK powers ahead with vaccines delivery, Australian scientists have raised questions about the ability of the AstraZeneca vaccine to create herd immunity and called for a pause on its rollout.

The doubts over the vaccine have put the government’s plans in chaos with 53 million doses of the AstraZeneca jab waiting to be administered. Professor Stephen Turner, president of the Australian and New Zealand Society for Immunology (ASI), said:

“The question is really whether it is able to provide herd immunity. We are playing a long game here. We don’t know how long that will take”.

He also suggested that the government should pivot more towards adding increased numbers of the Moderna and Pfizer vaccines. Data has shown that the AstraZeneca jab has a 62% success rate, while Pfizer insists their dose has 90%.

The issue could put Australia’s path out of lockdowns in doubt, despite the fact that Australia’s total fatality count is 909, while the UK saw four-straight days higher than that in the last week alone.

Bank of England Governor Sees no Rush to Negative Rates

The Bank of England governor Andrew Bailey has talked of the UK economy facing its “darkest hour” due to the latest lockdowns in an online speech to the Scottish Chambers of Commerce.

Despite this, the governor sees the unemployment rate in the country lower than previous expectations of 7-8% due to the extended furlough scheme. Bailey also said that there were “a lot of issues” with a move to negative interest rates and that such a move could hurt banks.

His comments have boosted the pound sterling, and the AUD to GBP outlook could see more of a bearish tone as the UK looks on course for herd immunity faster than Australia. The central bank has also confirmed that they are in no hurry to move to negative rates and if the government can deliver the vaccines as scheduled, then the economy could get back open fully by the second quarter.

The BoE governor also said it would wait before delivering any additional stimulus measures. He added that the bank had seen some evidence of disruption from the UK’s EU exit, but it was not yet clear how long those delays would persist.

The AUD to GBP has been stalling at the 2020 highs near 0.5730 and the latest pound strength could flip the pair lower if the trends continue. If you have an upcoming currency exchange involving GBP to AUD, you can find out more about how the above factors are likely to impact it in the short term. Use the form below to get in touch.