The Pound Australian Dollar (GBP/AUD) exchange rate edged higher today following comments from Bank of England (BoE) Governor Andrew Bailey.
At the time of writing the Pound Australian Dollar exchange rate is currently trading at around AU$1.7971.
Pound (GBP) Steady on Back of Governor Andrew Bailey Comments
The Pound held steady against the Australian Dollar this morning after BoE Governor Andrew Bailey commented on the economic recovery of the UK, speaking to BBC this morning, Bailey said:
‘I’m now more positive but with a large dose of caution.’
When asked about a recent rise in interest rates Bailey argued that:
‘We have seen some increase in interest rates over the last month or so, as have other countries. My assessment so far is that that is consistent, I think, with the change in the economic outlook.’
The Pound has also found continued support in the decreasing coronavirus cases week on week, and an increase in vaccination doses in the UK, with over 24 million people having received their first dose.
Professor Anthony Harnden, deputy chairman of the Joint Committee on Vaccination and Immunisation commented on the success of the UK’s vaccine rollout saying:
‘Most people over the age of 50 will be vaccinated really within the next few weeks – so it is tremendously successful. We’re seeing a very sharp reduction in the deaths and hospitalisations throughout the country.’
Australian Dollar (AUD) Supported by Positive Chinese Data
The Australian Dollar (AUD) found support in positive retail sales and industrial production from the Australia’s largest trading partner, China.
Data from China showed a surge in the first two months of the year, Capital Economics senior China economist Julian Evans-Pritchard commented on the rebound saying:
‘We expect activity to remain strong in the near-term, as the easing of virus restrictions boosts consumption and fiscal stimulus among key trading partners should keep exports strong.’
However the Australian Dollar has had its gains limited today as the possibility of inflation rising quickly has caused US Treasury yields to rise which has strengthened the US Dollar, and in turn weakened a lot of the risk-sensitive currencies like the ‘Aussie.’
Pound Australian Dollar Outlook: BoE Decision in Focus
For Pound investors, the BoE’s interest rate will be the key focus in the coming days. The BoE is expected to keep interest rates at 0.1%, to help combat the effects of the coronavirus pandemic in the UK.
Though if the bank takes any surprising stances on the UK’s economic recovery, the Pound could head lower, though Bailey’s comments today have caused investors to remain optimistic.
For Australian Dollar traders the release of the Reserve Bank of Australia’s (RBA) meeting minutes tomorrow will be in focus. If the minutes shows a more optimistic tone from the RBA, AUD is likely to be supported further.
The Pound Australian Dollar will also be moved by any further global coronavirus news.
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