The AUD to GBP exchange rate is higher by 0.60% on Thursday as the pair looks to rebound from recent sterling strength. The Aussie dollar is seeing strength across the board after the country’s trade balance hit a six-month high, despite tensions with China.
AUDGBP is trading at 0.5615 and the pair will look to head for the 2020 highs at 0.5730.
Aussie Trade and Virus Path Supports Further Gains
Australia’s trade surplus reached a six-month high for December after iron ore exports to China outweighed political tensions between the two nations. Coal shipments also boosted the trade outlook.
China is heavily reliant on steel for its economic plans and the country has no choice but to keep importing ore as the price hits multi-year highs. Australia and China saw diplomatic tensions rise after the politicians criticized China’s handling of the virus.
The Australian Bureau of Statistics released data showing exports to China had jumped 20% in December to reach six-month highs of A$13.3 billion. The figures from Australia have given the Aussie dollar a boost and the country’s central bank also doubled their stimulus package on Monday. The country also racked up another run of virus-free days, but this was halted by another lockdown in the Western Australian city of Perth.
Bank of England Will Drive Sterling into Friday
The Bank of England are set to announce their latest interest rate and monetary policy actions later today and this will determine the AUDGBP pair’s price action into Friday. The BoE is expected to hold rates at 0.1% and most economists also expect them to avoid further stimulus, but that was the expectation for the RBA.
The UK’s central bank will also release the latest quarterly outlook for the country, with a report on negative interest rates. These two documents will probably have more effect on the currency rate as traders map out the potential path ahead for the Australian dollar vs the British pound.
Britain has vaccinated almost ten million people in the country, and this could see their economy open up sooner than expected. The Australian vaccine program is expected to happen later in the year, but they are seeing little spread of the virus and are benefiting from China’s rebound.
The AUDGBP is on track for a further move lower towards the 0.5500 level and the BoE could seal that move if they hold off on further stimulus. Speak to us ahead of the BoE Interest Rate Decision later today to find out more about the potential impact on your currency exchange.