AUD to GBP Secures Support and Looks for 0.5600

AUDGBP Starts the Week Higher After Jobs Slump

The AUD to GBP exchange rate has bounced again on Friday to secure support at the 0.5560 level. The pair has traded in a tight range for the week but will now attempt to move above 0.5600.

AUDGBP is trading at 0.5586 on Monday and the market has consumer confidence for the Australian economy on Wednesday.

Australian Government Reassures Citizens Over Vaccine

The Australia government looked to reassure its population on Monday about the safety of the AstraZeneca vaccine after South Africa suspended use of the shot. Providing data that showed the vaccine only reduced mild-to-moderate symptoms by 22%, South Africa move on Sunday to put its use on hold.

The Australian regulator was set to approve the vaccine within the next few days and the country’s entire programme is based on 53 million doses of the vaccine. The move highlights yet another botched response with governments as the EU has also suffered from delays. In the EU’s defence, they at least used different manufactures.

If the Astra vaccine got shelved by other countries, then it could make Australia’s path to fully reopening harder. The country saw only one new local case on Monday, but authorities have been aggressive about pushing lockdowns on the nation despite very low numbers compared to the world’s trouble spots.

Central Banks and Economies on Diverging Paths

The Bank of England and the Reserve Bank of Australia diverged on policy last week, with Australian policymakers doubling their current stimulus program to A$200bn, while the UK held off on any new action. The BoE also predicted a bounce for the economy in the second quarter and removed the talk of imminent negative rates.

The Australian economy has done well, but the country has been running closer to normal levels of activity. The bank is also nervous as the government winds down wage subsidies with the current stimulus action. It may be the case that the UK will see its economy perform better if the country does reopen around March as has been suggested.

Investors are not really moving markets based on the path of vaccinations but if the UK was to open its economy up, Australia could be heading out of their summer season with a questionable COVID vaccine. That could see the country struggle if they keep pushing lockdowns and halt travel despite low case numbers. Australia has still only seen 900 fatalities attributed to the virus over the last year, which is small in relation to the tens of thousands reported elsewhere.

The AUD to GBP rate would look to test the 0.5500 level if the pound was to see further buyers emerge. If you have an upcoming AUD requirement, feel free to get in touch using the form below to discuss what’s moving the rate.