The AUDGBP exchange rate topped the 2020 highs at 0.5735 yesterday as UK Purchasing Manager’s Index (PMI) data failed to inspire investors. The pair is lower on Thursday, but the trend continues higher with sterling unable to see any real support. Services PMI data from the UK came in lower than forecast, while the country also saw its highest coronavirus fatality count since April.
AUDGBP was trading lower by 0.13% at 0.5720 as the Aussie dollar pauses at the resistance level.
Australia and UK Both Seek to Speed up Vaccine Release
Fears of coronavirus clusters in Sydney have seen Australian health authorities making plans to bring forward its vaccine plan by two weeks to early March.
The UK is in a strict lockdown, but the country is still seeing the highest fatality rate since April last year, but the numbers count those with a positive test within 28 days, so the current lockdowns will bring this figure lower. Prime Minister Boris Johnson said there was “no choice” but to enforce another lockdown and the government are looking to open new vaccination centres next week as the country faces a “sprint” to vaccinate those in the population that are in the most vulnerable age groups. UK politicians returned from the holiday recess for a second time to debate the lockdown measures.
Pound Under Pressure From Weak PMI Data
The AUDGBP rate was boosted higher yesterday after weaker PMI data for the UK economy. The services sector is a big part of the country’s economy and the data showed the sector is struggling to grow. This is no surprise with the travel and leisure industries shut down, while much of the financial services sector works from home.
The Australian economy has seen strength in recent weeks with higher jobs numbers, strong PMI data and gains in iron ore prices. The only downside for the Aussie economy is the ongoing trade spat, which saw China adding some tariffs to imports from Australia. That was fuelled by the country joining criticism of China’s handling of the virus. Yesterday saw Australia urging China to give investigators from the World Health Organisation (WHO) access “without delay” to the country as the countries seek t heal the rift.
The Bank of England Governor Andrew Bailey told MPs that the recent Brexit agreement could add to the country’s economic woes with a hit relative to £80 billion, but gave little in the way of details. The bank has already squeezed interest rates to a record low of 0.1% and the bank had mulled negative interest rates in the event of No Deal. The continued reliance on lockdowns could still see this as a reality as vaccines are unlikely to have much effect until at least the second quarter.
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