The Pound Australian Dollar exchange rate dipped today after a slew of media reports suggested the scheduled final lifting of lockdown measures in England on 21 June could face a delay by up to two to four weeks because of soaring coronavirus infection cases.
What’s Been Happening: UK Economy Remains Strong But Covid-19 Fears Linger
The Pound Australian exchange rate dipped last week following news that Australia’s state of Victoria would extend its lockdown period by another week to curb an outbreak of the Kappa variant of Covid-19.
Last week also saw the Reserve Bank of Australia (RBA) keep interest rates on hold at 0.1% while in a somewhat dovish commentary indicated rates would remain at low levels for the near future.
RBA Governor Philip Lowe commented that the outlook for Australia’s economic recovery has been ‘stronger than earlier expected’, adding:
‘The bank’s central scenario is for GDP to grow by 4.75% over this year and 3.5% over 2022. This outlook is supported by fiscal measures and very accommodative financial conditions.’
Meanwhile, the Pound shed some of its gains in the latter half of the week over fears that the Delta variant of Covid-19 could delay the final easing of lockdown measures on 21 June.
In UK economic news, last week saw the publication of May’s manufacturing PMI, which fell below forecasts but remained markedly strong as the nation’s economy reopened last month.
Three Things to Watch Out for This Week
UK Covid-19 Developments
GBP investors will continue to monitor the UK’s Covid-19 situation this week. If it looks like the full easing of lockdown measures could be delayed on 21 June, then Sterling would suffer.
Australia’s Consumer Confidence
Australia’s consumer confidence report for June, to be released on Wednesday, will be in focus this week. Any signs of rising consumer morale would be AUD-positive.
The risk-sensitive ‘Aussie’ could fall this week if global Covid-19 cases show a rising trend.
Pound Australian Dollar Forecast
The GBP/AUD exchange rate could fall this week if the UK Government announces any plans – or even hints – at possibly delaying the full easing of lockdown measures on 21 June.