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Pound Australian Dollar Exchange Rate News: GBP/AUD Slumps amid Easing Coronavirus Concerns

January 10, 2022 - Written by John Cameron

GBP/AUD Drops as Coronavirus Anxieties Ease

The Pound Australian Dollar (GBP/AUD) exchange rate is falling at the beginning of today’s session in response as easing Covid concerns fosters a risk-on mood.

At the time of writing, the GBP/AUD exchange rate is trading at approximately AU$1.8873, down roughly by 0.2%.

Pound (GBP) Falls Despite ‘Pandemic to Endemic’ Goals

The Pound (GBP) is dropping against the Australian Dollar (AUD) at the beginning of today’s session in spite of easing Coronavirus concerns in the UK.

As the case numbers continue to rise, with an additional 141,472 new cases confirmed on Sunday, the UK remains one of the most open economies in Europe.

The UK Government is also discussing potential change to the required isolation period, reducing it from seven days to five, ‘driven by advice from the experts’.

However, experts are concerned that up to 30% of individuals may still be contagious if released on day five which would generate an increase in case numbers and potentially injure the UK economy.

On the other hand, Nadhim Zahawi, Secretary of State for Education, is optimistic that the UK will become a leading country following the pandemic.

Zahawi said:

‘I hope we will be one of the first major economies to demonstrate to the world how you transition from pandemic to endemic, and then deal with this however long it remains with us, whether that’s five, six, seven, 10 years.’

Furthermore, CME’s BoEWatch toll currently suggests the odds of the Bank of England (BoE) hiking interest rates at its February meeting are roughly 100%, which could be helping to cap Sterling’s losses this morning.

Australian Dollar (AUD) Soars as Economy Must ‘Push Through’ Rising Coronavirus Cases

Meanwhile, the Australian Dollar (AUD) is climbing against the Pound (GBP) this morning as it enjoys a risk-on market sentiment.

The ‘Aussie’ is also being cheered by the Australian Government’s decision to ‘push through’ the rising coronavirus case numbers rather than heading back into lockdown.

Australian Prime Minister, Scott Morrison, said:

‘Omicron is a gear change and we have to push through.

‘You've got two choices here: you can push through or you can lock down. We are for pushing through.’

The ‘push through’ approach is boosting the ‘Aussie’ amidst hopes Australia will avoid further economic disruption.

The Australian healthcare system is coping well with the current 3500 Covid-19 patients, although higher than last week’s 2000.

This is further boosting AUD’s appeal.

GBP/AUD Exchange Rate Forecast: Will Trade Data Support the ‘Aussie’?

Looking ahead, the Pound Australian Dollar (GBP/AUD) exchange rate is likely to remain sensitive to Covid headlines going forward.

Scott Morrison, Australian Prime Minister, is due to submit his proposals for widening transport, and other key sectors, this week to the state leaders present at the national cabinet.

As citizens may have more transport available, allowing them to travel easier within the country which should, in turn, support the local economy and boost the Australian Dollar’s appeal.

Additionally, Australia will publish is latest trade figures on Tuesday. A narrowing of the country’s trade surplus in November could weak AUD exchange rates.

On the other hand, Sterling may remain vulnerable to Coronavirus developments throughout the week due to an absence of notable data until Friday.

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