The GBP AUD exchange rate was flat on Monday despite the pound being hit against other currencies. The British pound was weighed by the potential for a two-week lockdown after Christmas, alongside the departure of Brexit negotiator David Frost.
The GBP AUD exchange rate had tested the 1.8620 price level after the BoE rate rise last week.
UK turning Australian, and vice versa
The UK government seems to be turning Australian with the government seeking a new lockdown for a virus that has been associated with 12 deaths in the country. The Australian government meanwhile, is seeking to ‘live with the virus’.
New South Wales premier Dominic Perrottet defended his state’s refusal to enforce another lockdown, saying: “Now is our time to live with the virus”.
Perrottet added that people “need to also move away from fear”.
“There will always be new variants of this virus,” he said. New South Wales has seen 2,500 new coronavirus cases on Monday. On Sunday, the state had seen 2,566 new cases.
The country’s Prime Minister Scott Morrison also wanted a ‘sensible approach’ to the latest outbreak.
Meanwhile, Boris Johnson called a cabinet meeting for scientists to brief ministers with an expected 2-week lockdown coming after Christmas.
The Times newspaper said: “Boris Johnson is unlikely to impose further Covid restrictions before Christmas after delaying a decision today. No announcement is expected today – ministers don’t think the data is there, despite warnings from scientists.”
Australia invests heavily in digital economy
Australia is looking to reinforce its digital economy with a $252.5 million investment.
The government is spending the money to transform the country into a modern digital economy by 2030.
The investment came as the Treasury released its mid-year economic and fiscal outlook last week with the spend coming over four years.
The UK is also looking to expand its digital capabilities and recently signed a ground-breaking trade deal with Singapore. It marks the first digitally focused trade agreement ever by a European nation. The trade deal was agreed in record time by International Trade Secretary Anne Marie Trevelyan and Singapore Minister S. Iswaran.
The DEA will bring the trading relationship with Singapore, worth £16 billion in 2020, to the next level by overhauling old trade rules that affect goods and services exporters. Thirty percent of UK exports to Singapore are already digitally delivered, with the deal opening doors to expand digital trade.
The UK economy will see consumer confidence figures released tomorrow but they are unlikely to move the GBP v AUD much. UK shoppers abandoned the high street at the weekend with footfall down 2.6% on the previous week.
“The growing nervousness of consumers meant that footfall increases dwindled with each day that passed,” said Springboard director Diane Wehrle. “This provided a forewarning for subdued performance of bricks and mortar stores and destinations over the weekend, which … is exactly what occurred.”
Pantheon Macroeconomics estimated the economy could shrink by 1% between November and January with the potential for a 2% contraction with similar restrictions to last spring, or a 6% slump with a full lockdown.