January 18, 2021 - Written by John Cameron
STORY LINK Pound to Australian Dollar Exchange Rate Holds Steady as London Trials 24/7 Covid-19 Vaccination Centres
Sterling Struggles as Covid-19 Vaccine Supply Issues Dampen UK Market Mood
The Pound to Australian Dollar (AUD) exchange rate held steady today, with the pairing currently trading around AU$1.76.
Sterling struggled to rise against the ‘Aussie’ today despite news that London would begin trialling 24/7 Covid-19 vaccination centres.
However, GBP has been limited by growing fears of a slump in Covid-19 vaccine supplies, which could threaten Downing Street’s goal of vaccinating many of the vulnerable by mid-February.
UK Vaccine Minister, Nadhim Zahawi, commented:
‘We now have built a deployment infrastructure that can deploy as much vaccine as it comes through. And so it’s the vaccine supply – which remains lumpy, it remains challenging, you may have read over the weekend probably some of the challenges around Pfizer and of course Oxford/AstraZeneca – but I’m confident we can meet our target mid-Feb, [for] those top four cohorts.’
In UK economic news, today saw the publication of the Rightmove House Price Index for January, which fell below forecasts by -0.9%.
Tim Bannister, Rightmove's director of property data, commented:
‘As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.’
Australian Dollar Struggles Despite Improving Outlook for Chinese Economy
The Australian Dollar suffered today despite upbeat Chinese economic data, which pointed to a strong economic recovery in the final quarter of 2020.
With China being Australia’s largest trading partner, this has boosted confidence in the risk-sensitive ‘Aussie’.
However, with China – the world’s second-largest economy – suffering from a spike in Covid-19 infections, AUD investors are worried that it’s economy is not yet out of the woods.
Today also saw news that Australia is unlikely to open its borders this year even if most of its population is vaccinated.
As a result, this has dampened confidence in the Australian economy, which could suffer further setbacks in the months ahead.
Pound to Australian Dollar Forecast: Australian Consumer Confidence Data in Focus
Australian Dollar traders are awaiting tomorrow’s release of January’s Australian Westpac Consumer Confidence data.
Any signs that the outlook for Australia’s economy is improving would boost the ‘Aussie’.
Furthermore, if China’s economic outlook continues to improve, we will see demand for the risk-sensitive Australian Dollar continue to head higher.
Pound investors will be monitoring the UK’s Covid-19 developments this week.
If the UK Government’s and NHS coronavirus vaccine programme appears to be on course to vaccinating many vulnerable people by mid-February or March, then Sterling will rise.
The GBP/AUD exchange rate could edge higher this week, however, if risk sentiment worsens on growing global Covid-19 infection rates.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts