AUD to GBP Below Support as Sterling Holds Advantage

AUD GBP Sinks After Reserve Bank Disappoints

The AUD to GBP exchange rate is slightly higher in early trading on Wednesday as traders absorb the latest UK inflation figures. The numbers showed an increase of 0.1% over analysts’ expectations, but the pound gained yesterday, and investors are hesitant to go too far ahead of the Prime Minister’s “roadmap” on Monday.

AUDGBP is trading 0.09% higher at 0.5581 but the pound has gained on the week with a move through the 0.5600 level.

Tourism Boss Wants More Freedom in Aussie States

Tourism Australia’s managing director Phillipa Harrison has suggested that governments accept a higher threshold of risk with the virus in order to live with it. The sector has been hit by the closure of airports and state lines, while many are nervous about the end of the JobKeeper wage subsidy programme in March.

Ms Harrison said:

“Somewhere along the way it went to eradication and that was never the intention. I think we have a job to do to move public opinion from being that we must live in a COVID-zero environment to living in a COVID-normal environment where we live with this thing”.

Her comments come as Melbourne nears the end of a five-day lockdown over 11 cases in a hotel on the outskirts of the state, where the positive cases were generally spouses and hotel staff of the initial case. One boost for Australia has been the approval of the AstraZeneca vaccine this week and the order of additional Pfizer shots. The company will roll out its vaccination programme this week.

New Zealand has also just completed a three-day lockdown, which sounds ridiculous when considering the data that was shared earlier in 2020 that said cases could be undetected for 14 days.

For the AUD to GBP outlook, the future path will depend on Boris Johnson’s roadmap on Monday. The country has reportedly vaccinated 15 million of its population and could be on a path to second quarter growth, while nations such as Australia continue to see cases pop up.

AUDGBP Sees Central Banks on Different Paths

Today’s inflation figures from the UK, alongside the improved GDP last week, highlights an economy that is still bubbling under the surface despite the lockdown. If the Prime Minister gives a greenlight on Monday then the economy could boom in the second quarter, as predicted by the BoE. The central bank has taken their negative rate talk off the table and may have to sweat over inflation if the economy opens.

On the other side we have the Reserve Bank of Australia, who stated in the latest meeting minutes that “Very significant” monetary support could be needed for some time. The bank doubled its recent stimulus measures to AUD$200bn and the Australian economy has not seen a harsh lockdown like the UK.

The AUD to GBP exchange rate has declined from the beginning of 2021, but there may still be value in the British pound if the current trends continue. If you have an upcoming currency exchange involving the Aussie dollar, you can ask a question about these factors by using the form below.