May 11, 2021 - Written by John Cameron
STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Heads Higher as England’s Lockdown Easing is Confirmed for May
GBP/AUD Exchange Rate Rises Ahead of May’s Easing of UK Lockdown Measures
The Pound Australian Dollar (GBP/AUD) exchange rate rose today after Prime Minister Boris Johnson confirmed that England’s lockdown will be eased on 17 May. The pairing is trading around AU$1.80 at the time of writing.
GBP rose against the ‘Aussie’ after the PM confirmed that England will enter the next stage of lockdown easing, with households to be allowed to socialise indoors.
Restaurants and bars will also be allowed to serve indoors.
Pound investors have become more optimistic about the outlook for the UK economy, with the easing of lockdown measures expected to further speed up the nation’s economic growth in the months ahead.
Boris Johnson said:
‘The roadmap remains on track, our successful vaccination programme continues – more than two-thirds of adults in the UK have now had the first vaccine – and we can now look forward to unlocking cautiously but irreversibly.’
In UK Covid-19 news, daily Covid-19 infection rates continue to remain relatively low, despite being up by 708 compared to last week.
Daily death, however, remain in single figures, boosting confidence in the nation’s coronavirus vaccine rollout.
Australian Dollar (AUD) Exchange Rate Falls as Risk Sentiment Sours
The Australian Dollar (AUD) fell against Sterling today as risk sentiment grows softer, dampening demand for the risk-sensitive ‘Aussie’.
Risk appetite has been dampened by concerns for an upturn in US inflation. Weak US payroll figures has also soured risk sentiment with concerns rising over the outlook for the world’s largest economy.
Added to this, a selloff in equity markets has also weakened the AUD/GBP exchange rate.
Meanwhile, Australia’s Victoria is on alert following the first Covid-19 infection case in two months.
Victoria Chief Health Officer Brett Sutton warned:
‘There is definitely a sense of complacency creeping in… We haven't had really significant outbreaks for some time and people drop their guard, people go about life as if we haven't been through the 15 months we have all been through. But it is a reminder that we need to be on guard.’
Consequently, AUD investors are becoming increasingly concerned about Australia’s Covid-19 situation, limiting the appeal of the ‘Aussie’ as the outlook for the nation’s economy remains largely uncertain.
Pound Australia Dollar Exchange Rate Outlook: UK GDP Data in Focus
Australian Dollar (AUD) traders will be looking ahead to tomorrow’s release of the latest Australian Westpac consumer confidence report for May.
Any improvement in the outlook for the Australian economy would buoy the AUD/GBP exchange rate.
Pound (GBP) investors will eye the release of the flash publication of the UK GDP data for the first quarter.
Any signs of the UK economy suffering significantly in the first quarter of this year would drag down the Pound Australian Dollar exchange rate.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts