The AUD to GBP exchange rate was able to stem recent losses ahead of the 0.5500 level, but the Australian dollar is not seeing a strong bounce. The pair is 0.18% higher on Wednesday at 0.5538, but buyers have not emerged to mount a stronger recovery.
Queensland has been the latest Australian state to record coronavirus cases and the UK’s tentative move out of lockdown is helping to support the British Pound.
Australia cancels festival over one virus case
Australia’s coronavirus experience is an odd contrast to that going on in Western countries. The state of Brisbane saw a strict lockdown over two virus cases, while New South Wales has cancelled a music festival expected to host 15,000 people due to one virus case.
The question should be asked why the government are approving large-scale festivals to be planned if they are making snap calls on very low case numbers. The cancellation of the Byron Bay Bluesfest is also another blow to the arts and local communities after the JobKeeper furlough scheme was ended.
The AUD to GBP exchange rate is being held down by a slower vaccine rollout in Australia and Health Minister Greg Hunt refused to confirm if 4m doses had been administered by today’s deadline. He also distracted from a question about Prime Minister Scott Morrison’s promise of 6m by mid-May.
Hunt reiterated the targets were the same but Australia is seeing a divide amongst state health officials as criticism and blame flies for a failure to distribute vaccines efficiently. The Australian dollar could see pressure as it moves further out of the summer months. The country’s vaccination target was set for October.
UK GDP and Aussie PMIs ahead
Today will see the final release for the UK’s GDP growth in the fourth quarter of 2020. The number is likely to confirm recent estimates and there have been updates for 2020. Traders are looking ahead to the economy reopening and the country’s vaccination pace should keep a bid under sterling prices. The country’s statistics office, the ONS, has said that over 54% of the country now has immunity to the virus due to vaccinations. If the economy opens up as scheduled, then the UK can repair its growth figures and Australia would be vulnerable to further cases in the months ahead.
Tomorrow will also see manufacturing PMIs released for Australia with expectations for a 56.9 reading. The numbers dipped to 44 in May last year and have since recovered to hover near the 57 level, so there may not be much to drive the Aussie dollar in that release.
Balance of trade figures will also be released with a dip to A$9.7bn from last month’s A$10.1bn. The UK will see its own manufacturing PMIs released for March.
The AUDGBP could see a push towards the yearly lows as the Australian dollar struggles. That would set the market up for next week’s interest rate update from the RBA.