The AUDGBP exchange rate is trading 0.42% lower on Tuesday after the UK posted a better-than-expected jobs loss. It’s a sign of the times that the market has to cling to slight improvements on job losses, but the UK unemployment rate dipped to 5%.
AUDGBP is now trading at 0.5565 and it marks yet another failure of the Aussie dollar to rally above 0.5600, with the pair stalling at 0.5585.
Westpac Sees the Aussie Dollar Outperforming
The Australian Dollar is expected to outperform other currencies according to analysts at Westpac investment bank.
Foreign exchange forecasters predict that April should be a good month, but there are also risks in the global commodity markets.
“With crude prices leading commodities lower, the risks of further weakness for the Australian Dollar are clear to see,” said Richard Franulovich, Head of FX Strategy.
“However, with dividend conversion season continuing into April in Australia, the Australian Dollar should remain well supported on dips,” he added.
JP Morgan had previously predicted a “dividend supercycle” for Australian stocks this year, with the improved conditions at miners.
Australian equities and exports have been strong as the global recovery shunts forward, but the recent dip in oil prices could be the start of a correction. Markets have priced in a strong recovery for the global economy but Europe is largely in lockdown and these predictions may need to be amended lower.
UK Caught in Vaccine Drama but Numbers Should be Enough
The UK is currently caught up in another spat with the EU over vaccines as Europe threatens to block shipments to Britain. The EU vaccine rollout has been a failure in comparison to the UK and leaders are starting to go into defensive mode and blame the UK.
The proposed ban would slow the UK’s rollout by a couple of months, but the country has said that half of its citizens had received the vaccine, which is one of the highest levels in the world. The numbers should mean that Britain can go ahead with its proposed reopening in April and May.
This week saw Australia moving to allow the controversial vaccine to be manufactured in the country, which should improve its rollout down under. The Therapeutic Goods Administration gave its approval for the pharmaceutical company CSL to manufacture the vaccine at its two Melbourne plants.
The AUD to GBP rate is still hesitating about a breakout and will wait for the latest UK inflation rate tomorrow. Analysts are expecting a reading of 0.8% after 0.7% in the previous month. Markets have been concerned over rising US yields and the UK number could move the exchange rate if it diverges from forecasts. You can get in touch using the form below to discuss these factors in further detail ahead of the next next data release.