Currency News

Daily Exchange Rate Forecasts & Currency News

Pound to Australian Dollar (GBP/AUD) Exchange Rate Sinks as Covid-19 Vaccine News Boost Risk-Appetite

November 9, 2020 - Written by John Cameron

GBP/AUD Exchange Rate Falls as Risk-On Markets Buoy ‘Aussie’

The Pound to Australian Dollar (GBP/AUD) exchange rate fell by -0.5% today, with the pairing currently trading around AU$1.801.

The Australian Dollar (AUD) benefited from a combination of positive Covid-19 vaccine news and increased certainty over US elections following Democrat Joe Biden’s success as the new President-elect.

Biotech giants Pfizer and BioNTech have announced that their coronavirus vaccine is 90% effective, which ahs bought ‘incredible relief’ to financial markets according to Carig Erlam, an analyst at OANDA.

Mr Erlam commented:

‘We’ve been waiting for this moment for a long time and hopefully others will soon join Pfizer and BioNTech and enable us to break this vicious cycle of lockdowns and cautious reopenings that’s killing businesses, causing rising unemployment and massively adding to the debt load around the world.

‘This is the light at the end of the tunnel moment and just look at the reaction in the markets. One of incredible relief.’

Now that the US elections are essentially over, demand for the risk-averse ‘Aussie’ has improved, buoying the AUD/GBP exchange rate.

However, uncertainties remain, with US President Donald Trump yet to concede or acknowledge the victory of his opponent, Joe Biden.

Pound (GBP) Sinks Despite Hopes for Brexit Trade Agreement

The Pound (GBP) struggled today despite the US election providing a glimmer of hope for a post-Brexit trade deal between the UK and the European Union.

Following Democrat Joe Biden’s victory in the elections, GBP investors are now more hopeful that Downing Street will pursue securing a deal with the EU.

Biden and many Democrats have been critical of the Brexit process, particularly surrounding Northern Ireland.

Former Labour Prime Minister Gordon Brown told BBC Radio 4:

‘[Biden] is also worried about the Good Friday agreement – he is not going to allow a trade deal with Britain to happen if we in some way breach the Good Friday agreement.’

Meanwhile, UK markets are remaining cautious as many analysts expect a pre-Christmas slump owing to the new Covid-19 restrictions across the UK.

As a result, the outlook for Britain’s economy remains bleak as we head towards the middle of November.

GBP/AUD Outlook: Brexit News in Focus

Australian Dollar (AUD) investors will be awaiting tomorrow’s release of October’s National Australia Bank’s Business Confidence report.

Any slip in the outlook for Australia’s economy would prove AUD-negative.

GBP traders will be eyeing tomorrow’s publication of September’s UK ILO Unemployment Rate.

If the UK’s joblessness continues to edge higher, then the GBP/AUD exchange rate could suffer.

Meanwhile, Pound (GBP) traders will be awaiting Brexit news.

If it looks more likely that a trade deal could emerge from UK-EU negotiations, then Sterling could head higher.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts

Comments are currrently disabled