Pound Australian Dollar (GBP/AUD) Exchange Rate Reverses Lunchtime Lows

Pound Australian Dollar Exchange Rate Rises Briefly on AU Covid Headwinds

(Updated 17:00, 13/01/2022) The Pound Australian Dollar (GBP/AUD) exchange rate rose briefly this afternoon, before levelling out once more as both the Pound (GBP) and Australian Dollar (AUD) came under pressure.

A risk-on trading mood supported the ‘Aussie’ earlier today as the US Dollar (USD) maintained its downward trajectory in the wake of yesterday’s inflation release. However, upside was countered as the session wore on, given the array of headwinds facing the antipodean currency.

Concerns persist over staff shortages in Australia’s healthcare sector and are exacerbated by inadequate supplies of Covid PCR test components: three test centres in the Australian Capital Territory (ACT) announced yesterday that they were closing due to supply chain issues.

According to a spokesperson for ACT Health:

‘The ACT, like all jurisdictions, is working hard to manage its testing supplies, including reagents and consumables, which are in high demand across the country. The high demand for these items has been exacerbated by supply chain issues that have also been affecting other industries.’

Original article continues below:

GBP/AUD Exchange Rate Edges Lower as Boris Johnson Loses Support

The Pound Australian Dollar (GBP/AUD) exchange rate is inching down this morning amidst a lack of significant data from both the UK and Australia. GBP faces headwinds over a lack of confidence in Prime Minister Boris Johnson, following the ‘Partygate’ scandal.

At the time of writing, GBP/AUD is trading at A$1.8804, slightly lower than today’s opening levels.

Pound (GBP) Trades Mixed on Domestic Political Tensions

The Pound (GBP) is trading up against the majority of its peers today, despite facing downside over PM Boris Johnson’s alleged flouting of lockdown rules. Against the Australian Dollar (AUD) however, GBP is falling.

Johnson admitted yesterday that he did attend a Downing Street garden party in May 2020, in order to thank staff for their hard work. According to the Prime Minister, the event was represented as a staff gathering, hence his judgement that it was appropriate to be there.  

Public and political consensus is damning, however – both opposition party members and Tory backbenchers have called upon Johnson to resign, saying his behaviour is indefensible.

Shadow housing secretary Lisa Nandy gave interviews to BBC Breakfast and Sky News this morning to express her lack of confidence in the PM:

‘[Johnson] is clearly sorry, but he’s not sorry that he did it. I think he’s very sorry that he got caught… I agree with the very small number of Tories who’ve had the courage and integrity to come out and say that he must go. I think it is insulting to the country that he continues to hold office.’

Australian Dollar (AUD) Climbs on Risk-On Mood

The Australian Dollar (AUD) continues to benefit today from upbeat trading sentiment following yesterday’s US inflation release. The stronger reading illustrated the need for quicker interest rate hikes, reinforcing the Federal Reserve’s already hawkish outlook.

Elsewhere, AU Prime Minister Scott Morrison faces criticism for his handling of the Omicron-fuelled staffing crisis. Small businesses say the country’s latest rules are frustrating, while unions claim that workers are being encouraged to put themselves in harm’s way.

The staffing crisis has pushed supply chains to breaking point, forcing some retailers and hospitality venues to close. To combat the fallout, Morrison announced that some workers would be able to return to work after recording a negative rapid antigen test result – yet rebuffed calls to provide these tests for free.

Staffing shortages have also hit Australia’s healthcare sector, as one in three beds in Intensive Care Units (ICUs) are now occupied by Covid patients. The number of Covid patients in ICUs shot up from one in five in just one week.

Pound Australian Dollar Exchange Rate Forecast: UK GDP to Inspire Movement?

Looking ahead, the Pound Australian Dollar (GBP/AUD) exchange rate is likely to be influenced by the UK’s GDP release tomorrow. UK GDP is expected to have risen in November 2021 to 0.4%, potentially boosting Sterling sentiment.

Meanwhile, Australian Dollar trading could be affected by China’s December trade balance, given the strong trading relationship between the two countries. China’s trade surplus is expected to increase to $74.5bn, which could boost both the Chinese Yuan (CNY) and the ‘Aussie’.

Olivia Evershed

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