GBP/AUD Exchange Rate Volatile as Coronavirus Pandemic Dictates Movement

Modified: Friday, 29 January 2021 16:35 BST - Written by John Cameron

STORY LINK GBP/AUD Exchange Rate Volatile as Coronavirus Pandemic Dictates Movement

The Pound to Australian Dollar exchange rate was volatile today as coronavirus concerns push down Sterling.

At the time of writing the pairing is trading at AU$1.7874.

Pound Struggles for Direction Despite Fourth Vaccine Approval Hopes

The Pound found itself struggling today as despite hopes for a fourth vaccine approval in the UK, the currency couldn’t shake the current coronavirus situation.

Infections and deaths remain high across the UK even with the country being in a third national lockdown.

The second wave of the coronavirus pandemic has left investors jittery about the state of the UK economy, with early March now the proposed date to begin coming out of lockdown doing little to calm nerves.

As new strains of the virus run rampant, the UK is struggling to stay ahead of the pandemic.

Professor James Naismith, director of the Rosalind Franklin Institute, said today that:

‘The prevalence of infection rates remain high and this will translate to a high number of deaths in the weeks ahead. The new variant has, as we feared, proven very difficult to suppress with UK lockdown measures.’

Australian Dollar (AUD) Rangebound as Global-Risk Sentiment Decreases

The Australian Dollar has been slightly supported today, as the EU approves the use of the AstraZeneca vaccine in those over 18 years old.

The Australian economy does however remain muted as global-risk aversion rises on the back of coronavirus fears, and investors favour safe-haven currencies like the US Dollar (USD).

The latest bout of global anxiety over the coronavirus pandemic and the spread of new strains across the globe has kept the risk-sensitive Australian Dollar on the back foot for the majority of the day.

All eyes will be on the USD and volatility in global markets over the coming days, which could edge AUD down further.

Pound to Australian Dollar Outlook: RBA Interest Rate Decision in Focus

Pound investors will continue to keep an eye on any coronavirus developments in the coming days, with any news concerning new vaccine approvals proving positive for Sterling.

Traders will also look to the UK’s Markit Manufacturing PMI for January which is expected to contract, which could push down GBP further.

Australian Dollar investors will be focused on any global coronavirus developments, any indication that vaccine rollouts are delayed or not working as well as hoped would push investors to sell out the ‘Aussie.’

Australian Dollar traders will also be looking towards the Royal Bank of Australia’s (RBA) interest rate decision on Tuesday, which is expected to stay at 0.1%.

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TAGS: Forecasts