AUD to GBP Rate Aims for Third Day of Gains

AUD GBP Nears Recent Highs Ahead of Inflation Data

The AUD to GBP exchange rate was looking for a third-straight day of gains as the pair seeks to recover from new yearly highs in sterling on Thursday. Traders pushed the pound higher as the UK moves to reopening its economy and Australia saw Brisbane being the latest state facing virus restrictions.

AUDGBP trades around the 0.5560 level but the pair is looking for a real change in dynamics to see a breakout of the recent price range.

Aussie Exports Set to See Record High

Australia minerals and energy exports are expected to see a record high this year, as international demand for iron ore, lithium, nickel and copper remains strong.

Export revenues are expected to hit almost A$300 for 2020-21, according to estimates from the Department of Industry, Science, Energy and Resources. The analysis then sees a 3% dip in the following year on expectations of softer prices.

The risk to the predictions would still be relations between China and Australia after tariffs were placed on certain Aussie goods in the last year. Lithium is in steady demand around the world, due to its use in battery technology for electric vehicles and other technologies. Australian exports of lithium are seen growing more than five-fold, while nickel is expected to double.

Exports will continue to hold the Australian economy in good stead after the country saw jobs higher than pre-virus levels in the latest employment report.

UK Starts the Slow Road to Recovery

It seems a long time ago that Boris Johnson announced his roadmap for reopening and the UK took its first tentative steps out of lockdown on Monday.

A return to outdoor gatherings was the best that the government could muster, and the public has to wait until next month to see retail businesses and other establishments open. The AUD to GBP exchange rate outlook is looking for new drivers but we seem locked in a waiting game for the next Gross Domestic Product (GDP) releases. A loosening of restrictions in both Australia and the UK could alter the inflation picture and that is another potential game-changer down the line.

The pound will see final GDP figures for Q4 tomorrow but that is unlikely to shift from the previous figures, while we have already seen monthly updates for the start of the year. Australian building permits are expected to see a rise tomorrow, but the real issue for the country is in property prices, which is bringing risk that the RBA could intervene in the market.

New Zealand has just clamped down on speculators in its housing sector and Australia is likely to do the same if the government commits to its rate rise path of 2023-24. Aussies and speculators have been diving into the market due to the commitment to low rates and the stronger expectations for jobs than in other parts of the world. The end of the JobKeeper program brings risk to Aussie jobs, but it is in better state than the UK where almost 5 million are on furlough.

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