April 6, 2021 - Written by John Cameron
STORY LINK GBP/AUD Forecast: Pound Australian Dollar Exchange Rate Rangebound as RBA Holds Rates at 0.1%
The Pound to Australian Dollar (GBP/AUD) exchange rate is rangebound this morning after the Reserve Bank of Australia (RBA) chose to keep its interest rates at a record low of 0.1%.
At the time of writing, the GBP/AUD pairing are currently trading at around AU$1.8191, as the Pound finds support from Prime Minister Boris Johnson’s press conference on coronavirus lockdown easing yesterday.
GBP/AUD Exchange Rate Mixed as Second Stage of UK Lockdown Easing Gets the Go Ahead
The Pound has been supported this morning following on from a Downing Street press conference yesterday evening.
Prime Minister Boris Johnson confirmed to the public that England’s second stage of lockdown easing has the go ahead and will come into force next Monday, the 12th April.
Mr Johnson has however hinted that vaccine passports could be introduced on a voluntary basis for pubs, though ruled out certification for shops and public transport:
‘There is absolutely no question of people being asked to produce certification or a Covid-status report when they go to the shops or the pub garden or the hairdressers on Monday. On May 17, as you know, we’re hoping to go for the opening of indoor hospitality – we’re not planning for anything of that kind at that stage.’
A report from the London School of Hygiene and Tropical Medicine (LSHTM) suggested that Stage 2 of the road map ‘may lead to a small surge of cases and deaths’.
However, investors remain increasingly optimistic over England’s lockdown easing plan and the prospect of the UK economy reopening in the coming weeks.
Australian Dollar (AUD) Steady on RBA Interest Rate Decision
The Australian Dollar (AUD) is steady this morning after the RBA’s latest interest rate decision, where the bank kept rates unchanged at 0.1%, as expected.
The interest rate is expected to stay unchanged potentially until 2025, however the low rates have caused a sharp rise in house prices across Australia with no action to tackle the overheating of the housing market so far.
Furthermore, the $90 billion wage subsidy scheme, JobKeeper, came to an end during March, which is expected to result in up to 1.2 per cent of the workforce losing their jobs in the coming months.
However, Governor Lowe remained cautiously optimistic surrounding Australia’s economic recovery from the coronavirus pandemic, saying:
’While the path ahead is likely to remain bumpy and uneven, there are better prospects for a sustained recovery than there were a few months ago. Even so, the recovery remains dependent on the health situation and on significant fiscal and monetary support’
GBP/AUD Exchange Rate Outlook: Markit PMIs in Focus
Tomorrow will see the release of the UK’s final services PMI reading for March which is forecast to show a 7 point growth which is the first expansion in the service sector since October 2020 as the UK’s economy slowly starts to reopen from lockdown restrictions.
Australia Dollar traders will themselves be focused on the release of their own services PMI which is also forecast to have risen 3 points during March, the figure would add further support to AUD.
The GBP/AUD exchange rate will continue to be driven by any further global coronavirus developments, as cases continue to fall and vaccinations increase the exchange rate could push higher.
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TAGS: Pound Australian Dollar Forecasts