The British pound is higher against the Australian dollar on Wednesday.
- New vaccine hopes boost risk sentiment
- Arizona reports new record rise in daily cases
- US ISM Manufacturing flips into expansion in June
- Pound-Australian dollar exchange rate +0.49% this week
GBP/AUD was up by 104 pips (+0.58%) to 1.8064 as of 4pm GMT.
The currency pair was volatile in a sideways range for most of the day before get carried higher later in the day – up and beyond 1.805. Yesterday the exchange rate gained +0.28%.
GBP: Pound helped by vaccine news
Overall risk sentiment in markets tuned positive in the afternoon when news of a new vaccine helped the pound tread higher. An article from STAT News Agency said Pfizer/BioNTech is developing a vaccine showing positive results. Reportedly the vaccine spurred immune responses in healthy patients but had side effects at high doses.
Investors are logically paying a lot of attention to vaccine trials, which could swiftly put an end to the chances of a serious second wave of the coronavirus pandemic.
Rising cases of coronavirus in some states continue to keep investors on edge. Arizona cases rose by 4878, up 6.2% on the day- and a new record. New York City Mayor de Blasio postponed the opening of indoor restaurant dining over fears of a possible resurgence as seen in southern states.
AUD: US data improves sentiment
Weakness in the US dollar has been more favourable to the pound than to the Aussie in the past two days. Today better US economic data reduced the need for a haven, ushering the greenback lower and the pound to its second day of gains.
The US ISM manufacturing index for June was 52.6 versus the 49.8 estimate and a prior reading of 43.1. That meant the index unexpectedly switched into expansion territory for the first time since the pandemic began.
News from the June ADP employment report was less optimistic (2,369,000 vs. 2,900,000 expected) although revisions saw the data from May adjust higher to make them equivalent to the May NFP report.
Data on Wednesday was not favourable to the Aussie after building permits fell -16.4% versus a consensus of -10% and a previous reading of -2.1%.
