The AUD to GBP exchange rate is flat in early trading on Tuesday as traders await UK inflation figures tomorrow. The numbers could further remove the potential for rate cuts in the country and put the BoE on taper alert. Australia has now formally approved the Pfizer vaccine and will make efforts to roll this out later in the year.
AUDGBP is trading 0.04% lower at 0.5591 and traders have shrugged off RBA minutes seeing need for “very significant” support.
Economic Data Will Drive the Pair this Week
The UK will release its latest inflation figures on Wednesday and the number could support the pound. The market is looking for a reading of 0.5%, with a 1.3% reading for the core number. Both are expected to be 0.1% lower than last month because of the ongoing lockdowns, but if the reading is higher it could put pressure on the Bank of England, with policymakers not planning rate rises until later down the line.
Employment for the Australian economy will be released on Thursday and is expected to a show another 40k jobs were added after 50k in the previous month. The unemployment rate in the country has been stubborn and a 0.1% drop is expected to 6.5%.
Traders have ignored this morning’s RBA minutes but may be waiting for the release of the UK numbers. The Reserve Bank saw the potential for “very significant” monetary support over an extended period. The bank plans to hold rates at record lows until inflation is sustainably in a 2-3% target band. The bank also doesn’t see unemployment or inflation at targets until 2024.
Australia Sees Start of Vaccination Rollout
Australia’s medical regulator has given provisional approval to AstraZeneca’s coronavirus vaccine on Tuesday, strengthening the country’s vaccination plans, which it aims to start next week.
The approval was expected but it comes with some controversy after South Africa had ditched the shot over its lack of protection. The news was a boost for Australia as Melbourne neared the end of a five-day lockdown enforced after new cases on the outskirts of the city.
The federal government says it has ordered enough of the AstraZeneca vaccine, which will mostly be manufactured in Australia, to cover the country’s population of 25 million people. Australia has also ordered enough Pfizer vaccines to cover a fifth of the population.
Countries have criticised the UK’s granting of emergency approval for the vaccines, but they all end up approving it and are just about to start their programmes, while the UK has administered first doses to 25% of the population. The herd immunity issue will play a big factor in the currency outlook.
The AUD to GBP exchange rate was looking to test last year’s high of 05730 before the pound started its path towards the 0.5500 support level. The pair is trading in a range between 0.5550 and 0.5620 ahead of the economic releases.
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