Pound Australian Dollar (GBP/AUD) Exchange Rate Steady as 2021 Comes to a Close
The Pound Australian Dollar (GBP/AUD) exchange rate is trading sideways this morning in the final day of trade in 2021.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8599, virtually unchanged from this morning’s opening levels.
Pound (GBP) Consolidates Post-Christmas Gains
The Pound (GBP) is holding steady this morning as the currency consolidates its recent gains, with the GBP/AUD exchange rate having struck a new two-week low overnight on Thursday.
Sterling has raced higher this week -in spite of the holiday thinned trade- in response to the UK government’s decision not to tighten Covid restrictions in England before the New Year.
Despite a record jump in daily infections, driven by the highly infectious Omicron variant, new hospitalisations have so far remained relatively low.
Prime Minister Boris Johnson, tweeted at the start of the week:
‘We will continue to monitor the data carefully, but there will be no new restrictions introduced in England before the new year. However, I would urge everyone to continue to act cautiously given the rising number of Omicron cases.
‘Most importantly I urge everyone to get their first, second or booster jab without delay to protect yourselves and your loved ones.’
Despite the PM’s optimism, a number of health experts have expressed their concerns that the NHS could still be overwhelmed in early 2022.
Australian Dollar (AUD) Flat in Thin Trade
At the same time, the Australian Dollar (AUD) is also trading in a narrow range this morning as low liquidity and the closure of most major Asia-Pacific markets for New Year’s Eve, limits AUD trading opportunities.
Elsewhere movement in the ‘Aussie’ has been limited by concerns over Australia’s Covid situation as the country’s most populous state, New South Wales, reported another surge in new infections.
However, the downside potential of the Australian Dollar has also been limited by some positive Chinese data, with the NBS manufacturing PMI climbing to a five-month high in December.
Pound Australian Dollar Forecast: Omicron to Infuse Fresh Volatility?
Looking ahead to next week, the direction of the Pound Australian Dollar exchange rate will largely depend on whether or not the UK government is forced to impose new restrictions in England in response to pressure on the NHS.
Should Boris Johnson opt not to impose stricter measures then the GBP/AUD exchange rate could maintain its positive trajectory.
However the start of next year will also Brexit return to the spotlight as the UK finally implements its repeatedly delayed customs controls on goods entering the UK from the EU, with the potential disruption to trade potentially weighing on the Pound.
For AUD investors the focus next week will be on the publication of Australia’s latest PMI releases, which could weaken the ‘Aussie’ if they report economic activity in the private sector slowed in December.