January 15, 2021 - Written by John Cameron
STORY LINK Pound to Australian Dollar (GBP/AUD) Muted Despite GDP Beating Forecast
The Pound to Australian Dollar (GBP/AUD) exchange rate has made modest gains this week as the Pound attempts to rebound against the Australian Dollar.
The Pound Sterling’s gains, however, have been limited as better-than-expected, yet still disappointing, GDP data from the UK limits gains.
At the time of writing on Friday afternoon, the GBP/AUD exchange rate is currently trending in the region of 1.7611.
Pound (GBP) Exchange Rates Outlook Stumbling as UK Data Fails to Impress
The Pound (GBP) struggled to find any sort of support today as better than expected GDP data limited any losses.
Although beating forecasts of -5.7% the UK economy shrank by 2.6% in the month of November.
As a result of a second national lockdown, the UK economy was damaged and fears that a ‘double-dip recession’ loom over investors as the third national lockdown is expected to do further damage.
Furthermore, the UK’s travel ban from South America came into force today, though it has since been reported that one of the Brazilian coronavirus variants has already made its way to UK shores, sparking concerns that the government has been just a little too late.
Australian Dollar (AUD) Exchange Rates Weak against USD Rebound
The Australian Dollar (AUD) has had a weaker performance today, though the currency’s bullishness pushes the AUD further than its NZD neighbour.
The Australian Dollar has continued to remain attractive to investors as the nation controls its coronavirus pandemic situation boosting optimism that economic recovery for the country will happen soon rather than later.
However, the ‘Aussie’ has had notable losses against the US Dollar (USD) as the ‘Greenback’ rebounds.
Falling US retails sales have contributed to risk-off trade and increased demand for USD.
Elias Haddad, a strategist at the Commonwealth Bank of Australia explained:
‘The overnight correction in AUD/USD appears to be technical because iron ore future prices remain resilient and Austrian economic activity encouraging.’
Iron ore prices have limited losses, but because of souring sentiment AUD remains down.
Pound Australian Dollar Exchange Rate Outlook: Pound to fall short
Whilst the Pound (GBP) has found modest gains this week, the currency has started to falter as investors remain jittery over any coronavirus developments.
Investors will continue to monitor daily infection and death rates coming in from across the UK, any sharpening of restrictions would be a cause for concern for the Sterling.
Risk-sentiment will drive the Australian Dollar (AUD) in coming sessions due to lack of impactful data, rising coronavirus cases around the globe could negatively impact the risk-sensitive 'Aussie’ further.
AUD traders will also look to any change in US politics with any negative news expected to push traders to continue investing towards the safe-haven US Dollar.
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TAGS: Pound Australian Dollar Forecasts