Pound Australian Dollar (GBP/AUD) Fluctuated on UK Economic Disruption
The Pound Australian Dollar (GBP/AUD) exchange rate is trading narrowly today as national strikes weigh heavily on the UK economy in the run up to Christmas.
At time of writing, the GBP/AUD exchange rate is around $1.8121, relatively unchanged from this morning’s opening levels.
Pound (GBP) Undermined by Mounting Industrial Action
The Pound (GBP) is slipping against most of its peers this morning amid a lack of data leaving Sterling exposed to domestic woes. The cost-of-living crisis that has seen millions of households struggle, has led to increased industrial action over poor wages, and working conditions.
With rail strikes taking place in the run up to Christmas, industry bosses are warning of the fallout to the hospitality sector. With surging energy costs and staff shortages, restaurants are already closing at a faster rate than during the pandemic. Kate Nicholls, CEO of UKHospitality, said that businesses were reporting Christmas party cancellation rates of 30%. The missed revenue could top £1.5million. Nicholls added:
‘We’re getting into omicron territory. A lot of people are saying it’s too difficult to come in, and if you’re writing off next week, you might as well write off the week after. So it’s going to be an early Christmas shutdown.’
Australian Dollar (AUD) Subdued amid Mixed Risk Sentiment
The Australian Dollar (AUD) struggled to find a clear direction despite the continued positivity emanating from China. With the world’s second largest economy rolling back its strict zero-Covid policy, the relentless disruptions that have plagued China could finally start to ease.
Authorities in Shanghai confirmed earlier today that Covid test checks will no longer be required for venues and restaurants from Friday. Hong Kong also joined in with the relaxing restrictions by easing isolation rules for travellers. Investors will continue to keep a close eye on any further news regarding China’s zero-Covid policy.
Further weighing on global market sentiment, and in turn the risk-sensitive ‘Aussie’, were warnings from Putin over nuclear war. In comments made at Russia’s annual human rights council meeting, he admitted that the war in Ukraine could be ‘a lengthy process’. Putin also spoke of the prospect of a nuclear war:
‘Such a threat is growing, it would be wrong to hide it. We have not gone mad, we are aware of what nuclear weapons are.’
Pound Australian Dollar Exchange Rate Forecast: Lack of Data to Leave Sterling Listless?
Looking ahead, and without any major data to go by, the Pound Australian Dollar exchange rate could see the pair exposed to market sentiment. Any further updates from China easing their strict Covid stance could see a boost in risk sentiment.
Meanwhile, the relentless domestic headwinds persisting could prevent the Pound from making any substantial gains.