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Pound Australian Dollar Exchange Rate Rises amid Record Covid Case Numbers

Australian Dollar Currency Forecast

Pound Australian Dollar (GBP/AUD) Exchange Rate Trends Upward amid Soaring Covid-19 Cases

The Pound Australian Dollar exchange rate continued to climb after the end of yesterday’s European session, but dipped slightly overnight as investors favoured riskier currencies. The rate has since ticked upward slightly.

At time of writing the GBP/AUD exchange rate is at around $1.8582, which is up roughly 0.2% from this morning’s figures.

Pound (GBP) Muted as UK hits New Covid-19 Case High with Testing Limited

The Pound (GBP) is trading within a narrow range against its competitors today, as the UK hits another new record of Covid-19 cases and continues to struggle to provide sufficient Covid testing resources.

The UK recorded 189,213 new Covid-19 cases on Thursday, a new daily record and up 183,037 from Wednesday’s previous high. In comparison to many other European countries, the UK has not reintroduced any drastic restrictions to combat the Omicron variant which has likely helped keep the Pound buoyed.

There have however been significant problems in accessing Covid testing across the UK. A lack of available PCR bookings at test sites and poor supply of lateral flow tests have concerned health officials, who argue that testing access is crucial to ensure individuals can effectively isolate. National Pharmacy Association chairman Andrew Lane has said that supply of lateral flow tests remains ‘patchy’:

‘It is still very patchy though, so I will say that not every pharmacy today will have a box but most pharmacies in the country will be having a box so we just ask the public to persevere, and also treat us with respect.’

Australian Dollar (AUD) Boosted by Risk-on Market Mood

The Australian Dollar (AUD) has risen against its safer rivals today amid a risk-on market mood, despite the country record a new daily record of Covid-19 cases.

Australia reported more than 32,400 cases on Friday, representing a new pandemic high and far outstripping the previous record of 21,329 on Thursday. As the country’s total infections rise close to 400,000, both Prime Minister Scott Morrison and New South Wales Premier Dominic Perrottet have both encouraged revellers to continue to enjoy the New Year’s Celebrations.

The ‘Aussie’ has benefitted from a risk-on market mood, but should Covid-19 cases continue to shoot upward and cause further waves of worker isolations then it could push the currency down.

The Australian Dollar may see a boost however, after reports primary export partner China’s factory activity accelerated slightly in December.

The index rose slightly above forecasts to 50.3 in December, although analysts have warned that significant headwinds in the future are likely to drastically slowdown growth in the fourth quarter. Local disruptions due to Covid-19 outbreaks, curbs to combat carbon emissions, and significant debt issues in China’s property sector are all thought to be potential drivers.

GBP/AUD Exchange Rate Forecast: Will Both Countries See Poor PMI Readings?

Looking ahead to next week, the UK will see the final readings of PMIs for December on Tuesday and Thursday. Both manufacturing and service sector PMIs are forecast to fall slightly, which could push the Pound down slightly.

The Pound is also likely to be affected by soaring Covid-19 case numbers, with any restrictions introduced also likely to cause the Pound to fall.

Australia will also see December’s final readings of manufacturing and service sector PMIs on Monday and Wednesday, both of which are forecast to fall and may dent confidence in the Australian Dollar.

The Reserve Bank of Australia’s (RBA) chart pack on Wednesday may inspire some speculative bets by investors depending on the nature of the central bank’s guidance.