Pound Australian Dollar Exchange Rate Climbs on Pound Tailwinds
(Updated 15:30, 29/12/2021) The Pound Australian Dollar (GBP/AUD) exchange rate extends this morning’s uptrend as the session draws on, with upbeat GBP sentiment lending support. Success in the London stock markets, alongside lowering gas prices and upbeat economic predictions, helped to buoy the Pound (GBP) despite warnings of higher living costs and reduced travel to and from the UK.
According to the Guardian, 122 companies listed on the London Stock Exchange (LSE) this year, raising over £16.8bn. LSE has raised more capital for IPOs than any year since 2007, and more (they report) than Amsterdam and Paris put together.
Also boosting Sterling sentiment, several tankers of liquified natural gas initially heading from the US to Asia have diverted to the continent, bringing down gas prices from their record highs. The day-ahead cost of UK wholesale gas tumbled by over 11% this morning to 203p per therm from over 450p per therm last week: the lowest since mid-November.
Meanwhile, the Australian Dollar (AUD) continues to have gains capped by Omicron uncertainty and uneven risk sentiment. Widespread confusion follows an announcement that Covid isolation rules may be relaxed hours after test positivity rates soar.
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GBP/AUD Exchange Rate Fluctuates on Risk-On Mood
The Pound Australian Dollar (GBP/AUD) exchange rate is range bound this morning as stocks are up and global Omicron concerns ease. The Pound (GBP) faces headwinds, however, as UK Covid cases hit a new record high.
At the time of writing, GBP/AUD is trading at A$1.8553, virtually unchanged from today’s opening levels.
Pound (GBP) Trades Uneven Amidst Record Covid Cases
The Pound is trending down against several peers this morning as the UK reported a record number of Covid-19 infections on Tuesday. Cases in England hit 117,093: some 9,546 people are in hospital with Covid, the highest since March but well below January’s peak of 34,000.
Nevertheless, concerns surrounding the Omicron variant persist as experts say that a full national picture will only be available again in the first week of January.
A shortage of lateral flow test kits is also causing frustration amongst healthcare professionals and the public, as those instructed to test for coronavirus at home are unable to carry out the procedure.
Leyla Hannbeck, chief executive of the Association Of Independent Multiple Pharmacies, remarks that:
‘Because of the issues around supply being patchy and inconsistent it means that those who come forward for the test don’t always get it, which very stressful not just for the pharmacy but also for the patients.’
Australian Dollar (AUD) Enjoys Tailwinds from Risk-On Mood
The Australian Dollar (AUD) is trading up overall this morning as an upbeat market mood boosts investors’ appetite for risk-on currencies. Gains are capped, however, by surging Omicron cases and hospitalisations across Australia.
On Wednesday, Victoria recorded 3,767 new cases of Covid, up from 2,738 the day before: Queensland recorded 1,589 cases and South Australia reported 1,471 new cases. In NSW there are now 625 people in hospital with the virus – up by 68 compared to Tuesday.
Prime Minister Scott Morrison has called an emergency national cabinet meeting ahead of schedule on Thursday to discuss the matter.
Despite growing concerns, however, NSW Premier Dominic Perrottet has defended his decision to ease restrictions in December.
Perrottet said: ‘In every press conference we’ve said case numbers will increase. Now they’re increasing. We need to learn to live alongside the virus and we’re doing just that.’
Pound Australian Dollar Exchange Rate Forecast: Chinese Data to Influence Trading?
Looking ahead, a lack of UK and Australian data exposes both currencies to external factors. Covid headlines are likely to be one of the main trading influences, with rising case numbers capping currencies’ gains.
Elsewhere, data from China may affect AUD trading, as the ‘Aussie’ is a proxy for the Chinese economy. Recently, news that Beijing is raising the import quota on Australian wool boosted the currency: if Friday’s PMIs increase as expected, the Pound Australian Dollar exchange rate could come under pressure.