The AUDGBP exchange rate was unable to hold gains above the 0.5600 level last week but the coin still trades at 0.5570. The pair has traded around a tight range of 100 pips since late-January the UK has two data points this week that could drive a breakout.
AUDGBP is -0.13% lower this morning as traders await tomorrow’s UK jobs number, while Wednesday will bring February inflation figures for the British economy.
UK Inflation Comes When Markets Are on Alert
Last week was dominated by the Federal Reserve’s latest interest rate decision and, although the bank’s Chairman Jerome Powell committed to being “highly accommodative,” markets were still nervous about US 10-yr yields rising to 1.70%. This brings risk for the Aussie dollar due to its reliance on commodities and it being viewed as a riskier investment.
The UK employment has been rather bleak, while in contrast, the Australian economy recently saw jobs at a higher level than before the pandemic. Tuesday’s prediction is for a loss of -170k jobs in the UK, up from -114k in the previous month. The country is still losing jobs despite the extended furlough scheme as businesses throw in the towel with the ongoing closures.
Inflation for Britain on Wednesday is expected to move higher from 0.7% to 0.8% and markets will have a close eye on this number after the recent US yield moves. Central banks seem happy to let yields rise a little as they wait for their respective economies to reopen. Policymakers probably want asset markets to cool off a little with stocks in the US grinding higher and higher despite valuations being stretched.
Australia Ups Vaccination Pace, UK Sees Delay Risk
Australia began accelerating the pace of its coronavirus vaccination program after Canberra gave its approval for local manufacturing of AstraZeneca’s controversial vaccine.
The country’s Minister for Health Greg Hunt said 1,000 GPs will now be able to administer the shot. The UK has seen mixed news over its own rollout with the country saying last week that half of the country had now had a first dose, while the weekend supposedly saw record days for vaccinations.
However, the EU is now threatening a ban on exports of the vaccine, which UK defence secretary Ben Wallace said would be “counterproductive”. The EU’s warning comes as the bloc sees growing frustration that it is not getting the supplies that it needs from the British-Swedish manufacturer. Germany is also said to be considering joining France in another lockdown extension into April.
Mr Wallace added: “The grown-up thing would be for the European Commission and some of the European leaders to not indulge in rhetoric but to recognise the obligations that we all have”. It has been estimated that a ban from the EU would slow the UK’s rollout plan and this could hurt sterling.
If you have a currency exchange involving Australian dollars, get in touch using the form below to be kept up to date with the latest market movements.