GBP AUD Lower as Australia Delays Border Reopening

GBP AUD Weak as RBA Governor Signals 50bps Hike 

The GBP AUD exchange rate was lower by -0.25% on Monday despite Australia delaying the reopening of its borders due to fears over the new coronavirus variant. In the UK, Boris Johnson declined a request from Scotland and Wales to enforce quarantines. Tuesday has third quarter economic growth for Australia with analysts expecting a contraction due to the recent lockdowns.

The GBP AUD exchange rate was trading at 1.8675 after giving up some of Friday’s gains.

Australia delays reopening of borders over new virus variant

Australia has said it will delay the planned reopening of its borders to international travellers by at least two weeks.

The reopening had been planned for December 1st, but the government have backtracked after the country identified its first cases of the variant of coronavirus, which has led to many countries banning visitors.

Australian Prime Minister Scott Morrison recently announced that the country would open up to foreign visitors with eligible visas.

However, after an emergency meeting between Morrison and his national security committee, the decision was taken to delay the reopening.

“The temporary pause will ensure Australia can gather the information we need to better understand the omicron variant, including the efficacy of the vaccine, the range of illness, including if it may generate more mild symptoms, and the level of transmission,” Mr Morrison said in a statement.

The Australian dollar had received a boost from the reopening news and is gaining from the fact that the UK has more cases at present, despite many unknowns about the virus.

Boris Johnson refuses to enforce an eight-day quarantine

UK Prime Minister, Boris Johnson, has also been dealing with entry regulations as he declined a request by Scotland and Wales to enforce an eight-day quarantine.

The two countries had written a joint letter in a bid to slow entry into the UK. After several cases of the variant were detected in England, Switzerland has imposed a 10-day quarantine on all UK arrivals. Meanwhile, Spain has said only fully vaccinated Brits will be permitted into the country.

However, the UK has reimposed the requirement for arrivals to have a day two PCR test, with a new rule that travellers must self-isolate until they receive a negative result.

The pound sterling versus Australian dollar has a GDP update for the Australian economy today that will divert attention from virus talk for a short time. The rest of the week will likely be driven by headlines and government decisions.

A poll of 24 economists expected the economy to have contracted by -2.7% during the July-September quarter. Forecasts ranged from -3.8% to -1.9%.

That would be a turnaround from the 1.8% and 0.7% growth rates in the previous two quarters, but the downturn was driven by lockdowns.

“Extended stay-at-home orders in New South Wales and Victoria will have hit consumption, with services spending set to be particularly impacted,” said Felicity Emmett, senior economist at ANZ.