September 2, 2021 - Written by John Cameron
STORY LINK GBP/AUD Exchange Rate Dips as Australian Growth Boosts ‘Aussie’
GBP/AUD Exchange Rate Falls as Australia Avoids Recession
The Pound Australian Dollar (GBP/AUD) exchange rate dipped today following after the latest ABS figures revealed that the Australian economy had grown by 0.7% in June, avoiding a recession – for now. The pairing is currently trading around AU$1.86.
Deloitte Access Economics partner Stephen Smith described June as being the ‘eye of the storm’ with ‘just 7% of the population locked down on any given day across the period’.
‘Since then, that share has averaged close to 45%, and we’re seeing the impacts of that flow through to businesses and jobs.’
Jim Chalmers, Shadow Treasurer, Australian Labor MP for Rankin, tweeted:
‘Today’s numbers show the economy was slowing even before the Sydney lockdown - a consequence of Morrison & Frydenberg's failures on vaccines, quarantine and economic support. Slower growth than the US, UK and OECD average and worse to come in the September [quarter].’
Today also saw the release of the latest Australian trade balance data for July, which beat forecasts and rose to $12,117 million.
However, with Australia’s strict zero-Covid policy, AUD investors are remaining cautious. Any further restrictions or lockdowns would impede the nation’s economic recovery.
Pound (GBP) Exchange Rate Dips as UK Faces Supply Chain Crisis
The Pound (GBP) fell today following news that UK supply chains could be facing a ‘perfect storm’ of price rises and worker shortages, according to Richard Harrow, the chief executive of the British Frozen Food Federation.
The British Retail Consortium (BRC) commented:
‘It's challenging at the moment and we expect it to get much more challenging over the next 3 months.
‘We've had challenging periods...what's different this time is we feel we're always just on the edge of coping. Anything exceptional will be a challenge.’
As a result, Pound investors have become concerned about the outlook for the UK economic recovery, which could face setbacks should supply chains and worker shortages should impede economic growth in the months ahead.
In absence of any notable UK economic data today, Pound traders will be eyeing the nation’s coronavirus developments.
If data points to an increase in daily cases, hospitalisations, or deaths, then the Pound Australian Dollar exchange rate would suffer.
GBP/AUD Exchange Rate Forecast: UK Services PMI in Focus
Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of the Australian Commonwealth Bank composite PMI for August.
Could an improvement in Australian economic growth boost the AUD/GBP exchange rate?
Tomorrow will see the release of the UK’s services PMI for August. Any improvement in the services sector would drive-up the GBP/AUD exchange rate.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts