Pound Australian Dollar Exchange Rate Rangebound, Concerns Grow for Australian Economy
(Updated: 27/08/2021 16:32) The Pound Australian Dollar exchange rate remained steady later this afternoon despite coronavirus case rates rising throughout most areas of England. The pairing is currently trading around AU$1.88.
According to a report from Public Health England, case have risen in all regions of England with exception to London, Yorkshire, and the Humber.
As a result, Pound traders have become more concerned about the outlook for the nation’s economy, with case rates expected to rise in the autumn and winter months.
Meanwhile, the ‘Aussie’s gains have been capped by growing concerns for the Australian economy, which is expected to suffer from the nation’s stringent zero-Covid policy.
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GBP/AUD Exchange Rate Edges Higher, UK Car Production Plunges in July
The Pound Australian Dollar (GBP/AUD) exchange rate is edged slightly higher this morning despite growing concerns over a UK labour shortage and falling car production. The pairing is currently trading around AU$1.89.
Mike Hawes, the chief executive Society of Motor Manufacturers and Traders (SMMT), commented on the latest car production data, which dropped to 53,400 vehicles in July, a fall of 37.6% compared to the same month last year:
‘These figures lay bare the extremely tough conditions UK car manufacturers continue to face. While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors show little sign of abating.’
Meanwhile, consumer-facing companies in the UK are becoming more worried about the economic outlook, particularly as they struggle to find workers.
Charlotte Dendy, the principal economist at CBI, said:
‘It’s clear that the service sector has performed well over the three months to August, revealing strong volumes and profits growth in our latest survey as the economy reopened over the summer. However, the outlook between sub-sectors is set to diverge over the quarter ahead, with a deterioration in prospects expected in consumer services.’
As a result, the outlook for the UK’s economy remains largely uncertain, with fears that growing Covid-19 cases could increase in the coming months, potentially slowing down the nation’s recovery once again. This has limited the appeal of Sterling.
Australian Dollar (AUD) Exchange Rate Falls as Covid-19 Rates Rise in New South Wales
The Australian Dollar (AUD) continued to struggle today following reports of rising coronavirus infections in New South Wales.
As a result, AUD has suffered from growing concerns for the Australian economy, which is likely to suffer further if Covid-19 cases continue to rise.
According to recent estimates from the NSW Treasury, the new lockdown could cost the state economy $16 billion.
Daniel Hunter, chief executive at Business NSW, commented:
‘This lockdown is much more severe and is having a larger economic impact on businesses than the first lockdown at the beginning of the pandemic.’
Due to the increasingly dark outlook for the Australian economy, the AUD/GBP exchange rate has dipped this week.
GBP/AUD Exchange Rate Outlook: Australian Retail Sales Data in Focus
Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of Australia’s retail sales for July.
Could a fall in retail sales further drive-down the AUD/GBP exchange rate?
Pound (GBP) investors will continue to monitor the UK’s Covid-19 situation. If cases and hospitalisations rise, then the Pound Australian Dollar (GBP/AUD) exchange rate would begin to shed some of this week’s gains.