The AUD to GBP exchange rate was 0.37% on Thursday despite the recent quarantine virus case growing to a cluster of 11. The move higher in the Aussie dollar is being driven by a rise in Australian consumer inflation expectations.
AUDGBP is trading at 0.5600 as the pair tries to mount a recovery after 2021 gains for the British Pound.
Consumer Inflation Boosts Aussie
The Australian dollar is higher today after a rise in consumer inflation expectations. The reading for February came in at 3.7% after expectations of 3.4%. The Australian economy has been less affected by the lockdowns and consumers are still seeing some freedom.
Tomorrow will see the latest GDP growth update for the British economy, alongside the trade balance figures and construction output. GDP is predicted to be 0.5% for December despite a move towards the current lockdowns. The Bank of England has projected a healthy bounce for the economy in the second quarter if the lockdowns are lifted in March and this may mean any GDP number will have limited effect.
Construction output is looking for a year-on-year figure of -0.2% and the exclusion of construction work in the lockdown has helped this number get closer to being flat for the 12 months. Finally, the UK will see the release of trade balance figures and this may be hampered by the Brexit issues seen near Christmas with lorries queuing at ports in the UK, while France closed its borders due to the virus.
Melbourne Virus Cases Build
The state of Victoria has reported three virus cases linked to the recent Holiday Inn quarantine case. Two of the cases were said to be partners of hotel staff, who previously tested positive and a hotel manager. The number of cases has now grown to 11 and Prime Minister, Scott Morrison, has insisted that hotel quarantine is the right strategy. The cases also call into question the UK government’s decision to copy the quarantine approach a year later when the vulnerable age groups within the country are almost fully vaccinated.
Western Australia has also extended its border restrictions on Victoria for another week, which means visitors will need to isolate for two weeks.
There was good news for Australia with the EU approving the first shipment of the Pfizer vaccine to Australia. The country was exposed after it had only ordered AstraZeneca vaccines and this was recently ditched by South Africa for its lack of effectiveness.
The AUD to GBP rate has resistance at last year’s highs of 0.5730 and this may be the path if the Aussie dollar continues to strengthen. If you have an upcoming currency exchange, get in touch using the form below to discuss these factors and their potential impact in further detail.