Pound Australian Dollar (GBP/AUD) Exchange Rate Drops amid Return of Risk Appetite
The Pound Australian Dollar (GBP/AUD) exchange rate is slipping lower today. A return of global risk appetite may be weighing on the currency pair. News that China will be relaxing its international travel restrictions could also be pushing GBP/AUD lower.
On the other hand, soaring Covid-19 case levels in China could be limiting losses for the exchange rate today.
At time of writing the GBP/AUD exchange rate is at around AU$1.7794, which is down around 0.4% from this morning’s opening figures.
Will Australian Dollar (AUD) Continue to Find Support from China Reopening?
The Australian Dollar (AUD) may continue to find support from the paring back of China’s international travel Covid restrictions today. Markets are hoping that the change in restrictions will lead to a boost in the country’s tourism sector.
The ‘Aussie’ could also be see gains if iron ore prices continue to edge higher, as well as a continued risk-on market mood.
The easing of China’s restrictions may be outweighed by a surge in Covid-19 cases, however. Experts have highlighted that the rapid unravelling of the country’s ‘zero Covid’ policy means that the virus is spreading mostly unchecked.
Looking ahead to the rest of the week, a range of Chinese data at the end of the week could see AUD slip if they print as forecast. Performance across the country’s private sectors is expected to contract further in December despite the relaxation in restrictions.
Pound (GBP) to Slip amid Widespread Industrial Action?
A lack of significant data for the Pound (GBP) this week could see movement in Sterling prompted by domestic headlines.
The impact of industrial action in the UK may push GBP lower today. 1000 Border Force staff are continuing their strike action which is set to affect arrivals at airports across the country. Rail staff in the west of England have also joined the sector’s rolling strikes.
The UK’s poor outlook may also add to the Pound’s woes today. Following a downward revision in third quarter GDP figures last week, analysts now anticipate a deeper recession than previously forecast.
Recent predictions of a cooldown in the UK’s housing sector could also see GBP slip. Finally, market bets on a slowdown in monetary policy tightening from the Bank of England (BoE) may affect the Pound’s chances today. Investors are paring back bets on aggressive action from the BoE.