GBP/AUD Down, Vaccine Hopes Buoy Aussie
The pound to Australian dollar (GBP/AUD) exchange rate fell by -0.3% in forex trading today. The pairing is currently trading around £1.79.
The Australian dollar (AUD) benefited from hopes over a coronavirus vaccine today. Reports announced that China may be on the road to developing a vaccine.
A Beijing group affiliated with the China National Pharmaceutical Group has achieved positive results on a Covid-19 vaccine candidate.
Tao Lina, a vaccine expert, said each person needs two doses of the inactivated vaccine to evoke an immune response. Moreover, 200 million doses would only meet the immunization needs of 100 million people. It’s still far from enough for China and the world at a time when vaccines are urgently needed.
However, some ‘Aussie’ investors are becoming more cautious. Today saw the biggest daily rise in coronavirus cases in two months.
This follows data from Australia’s second-most populous state, Victoria. This is where 75 new cases have increased Australia’s number of cases to 85 in 24-hours.
Meanwhile, Prime Minister Scott Morrison has urged states to continue easing lockdown restrictions. He insisted that the nation’s economy must be revived.
Nevertheless, Australian forex investors are becoming more optimistic that the global economic situation could improve in the coming months. Any hopes of a Covid-19 vaccine would also prove AUD-positive.
Pound (GBP) Down over Mortgage Approvals Dropping in May
The pound (GBP) fell today in the FX market after it was revealed that UK mortgage approvals slumped. Approvals of mortgages for house purchases declined to just 9,300 in May, down from April’s 15,800.
Ross Counsell, chartered surveyor and director at Good Move, was optimistic. He said they expect to see a boost in the long-term across the UK. This will be alongside a lift in mortgage and re-mortgage approvals.
This is thoroughly dependent on the government’s continuing plans to support employment and household income. Prime Minister Boris Johnson was dovish about coronavirus’ effect on Britain.
He said it was both nightmarish and a ‘disaster’. Consequently, GBP investors have remained cautious as, the UK is yet to show signs of recovery from the pandemic.
Meanwhile, AUD investors will be looking ahead to the release of June’s AiG Performance of Manufacturing Index. Any improvement in the country’s largest sector would prove AUD-positive.
Investors also await the speech from the Reserve Bank of Australia’s Guy Debelle. Any dovishness from the RBA would weigh on the ‘aussie’.
The Australian currency will remain sensitive to risk sentiment this week.
Consequently, we could see the GBP/AUD exchange rate begin to edge higher. This is based on fears of a second wave of the coronavirus.
Furthermore, the GBP/AUD exchange rate will remain sensitive to Brexit developments this week. Any signs of UK-EU talks failing would drag the sterling down further.
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