The AUD to GBP exchange rate saw a strong close higher on Friday that suggests the pair will look to reverse recent losses. Sterling has been strong since the beginning of the year, but the UK may not capitalize on its vaccination rollout, while Australia has started theirs.
AUDGBP is trading at 0.5620 and is slightly higher on Monday by 0.06%.
Pound awaits Johnson and employment
The UK has an important start to the week with Boris Johnson delivering his plan to reopen the economy today. The country has made quick work of its vaccination schedule with many of its vulnerable age groups now receiving the second dose of the vaccine.
The worry for sterling is that Johnson and Matt Hancock have both urged “caution” in their latest comments and the Prime Minister may not move as quickly as some would like. This would undo the good work and see the likes of Europe and Australia catch up on the country’s growth path.
Australia started their own vaccination campaign this week, while the country has been virus-free once again and this could pressure sterling after the currency was able to mount a recovery from the pandemic losses last year.
Tomorrow sees the release of UK employment and the country is expected to show yet another loss, this time at -30k jobs. This would be better than last month’s -88k loss in employment. These numbers are coming despite the furlough program and it is likely that the Chancellor will extend the scheme at his budget on the third of March.
The AUD to GBP outlook will be largely driven by Boris Johnson’s reopening strategy today and he could dampen the Bank of England’s rebound expectations for the second quarter if he goes too slow.
Aussie vaccines launch with protests
Australia officially launched its vaccine campaign on Monday amid protests, including a show of resistance at the final of the Australian Open tennis tournament.
The country will deliver 60,000 doses this week, starting with frontline workers and Prime Minister Scott Morrison was filmed getting one of the first shots.
The AUDGBP has moved above the 0.5600 level again and the pair could look to retest the highs of 2020 the Aussie dollar picks up further momentum. Sterling has been one of the strongest currencies as the Brexit premium was removed with the addition of fast vaccine delivery. Despite this, the economy is showing underlying cracks and if Johnson fails to reignite the economy with a fast reopening, it could see traders go defensive on the pound.