July 8, 2021 - Written by John Cameron
STORY LINK GBP/AUD Forecast: Pound Australian Dollar Exchange Rate Strengthens Amid Risk-Off Mood
The Pound to Australian Dollar (GBP/AUD) exchange rate has strengthened this morning as a risk-off mood limits the appeal of the ‘Aussie’.
At the time of writing the GBP/AUD pairing are trading around the AU$1.8530 level as the Pound clings to its gains in absence of economic data.
Pound (GBP) Strengthens Despite Coronavirus Reopening Concerns
The Pound has strengthened against the Australian Dollar this morning despite concerns over the UK government’s plan to ease lockdown restrictions and scrap social distancing measures on the 19th July.
A letter published earlier this morning in the medical journal The Lancet signed by over 100 experts, including Dr Chaand Nagpaul, the chair of the British Medical Association (BMA), called for the government to delay reopening:
‘In light of these grave risks, and given that vaccination offers the prospect of quickly reaching the same goal of population immunity without incurring them, we consider any strategy that tolerates high level of infection to be both unethical and illogical.’
‘As the third wave of the pandemic takes hold across England, the UK government plans to further re-open the nation. Implicit in this decision is the acceptance that infections will surge, but that this does matter because ‘vaccines have broken the link between infections and mortality’. On July 19 2021 — branded Freedom Day — almost all restrictions are set to end. We believe this decision is dangerous and premature.’
Australian Dollar (AUD) Lacks Direction as Gov Lowe Reiterates Dovish Stance
The Australian Dollar has been limited this morning as Reserve Bank of Australia (RBA) Governor Lowe reiterated in a speech that rates will not be adjusted until 2024.
More so, the Australian Dollar continues to struggle on the back of the surge in coronavirus cases across Australia.
Sydney has recorded its highest daily rise in Covid cases in months, despite the city being in lockdown for almost two weeks.
NSW Premier Gladys Berejiklian pleaded with residents to stay home, saying:
‘We just need people to stop interacting for this lockdown to work. Please stop visiting people indoors, outside your family, your household. Your immediate family means those you live with, it doesn't mean extended family or friends.’
A cautious market mood has limited the appeal of the risk-correlated ‘Aussie’ today as markets remained concerned over the delta variant of coronavirus.
GBP/AUD Exchange Rate Outlook: UK GDP Figures in Focus
For Pound investors, tomorrow will see the release of the latest GDP figures from the UK for May, with investors hoping for a higher reading to bolster Sterling heading into the weekend.
In absence of any economic data from Australia, traders will instead keep an eye on the global market mood before the weekend.
The GBP/AUD pairing will continue to be driven by any further coronavirus developments in the coming days as Pound investors await the final decision on the UK’s 19th July freedom day.
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TAGS: Pound Australian Dollar Forecasts