GBP AUD Hesitates as Traders Weigh Up Virus Path

GBP AUD Slips on Retail Sales and Trade Data

The GBP AUD exchange rate was higher by 0.13% but the price is still lower than Friday’s high. The UK and Australia are both experiencing cases of the latest virus variant but both Prime Ministers are hesitant to reintroduce lockdown measures. Traders were also awaiting GDP figures from the Australian economy for the third quarter.

The GBP AUD exchange rate was trading at 1.866 ahead of Australian GDP figures.

Australia not going back to lockdown insists Prime Minister

Australian Prime Minister Scott Morrison has said he will not push the country back into lockdown in response to the Omicron variant.

Morrison met with state and territory leaders to discuss the national response to the new variant. Morrison said ahead of the meeting that federal, state and territory governments would be cautious but ruled out a return to strict stay-at-home restrictions.

The PM said he would use the national cabinet meeting to ask state and territory leaders to hold their nerve and keep domestic borders open.

“We’re not going back to lockdowns. None of us want that,” he told reporters.

“What we did last night was protecting against that by having a sensible pause and to keep proceeding with where we are now and to further assess that information so we can move forward with confidence.”

Earlier in the day, Health Minister Greg Hunt said that the federal government’s “overwhelming view” is that the Omicron variant is “manageable.”

Traders are awaiting Australian GDP figures where markets are expecting a contraction due to the previous lockdowns. The GBP v AUD will drop if the damage is less than expected, despite the rollback of the international border reopening.

GDP is expected to have suffered its second largest contraction on record, but exports and stimulus should buffer the growth picture.

The GDP report due on Wednesday is forecast to show a drop of 2.7%, a contraction only beaten by the 7.0% plunge that followed the early days of the pandemic in 2020.

Boris Johnson also holding his nerve over restrictions

UK Prime Minister, Boris Johnson, has also stuck to the current path and refused to change the guidance on socializing.

Dr Jenny Harries, head of the UK’s Health Security Agency, said the public should reduce social contacts “a little bit” to “help to keep the virus at bay”.

The prime minister later said there was no need to “change the overall guidance about how people should be living their lives”.

However, it is still early with the UK only registering 14 cases of the new variant by Tuesday. Johnson pushed back on a plea from Wales and Scotland to implement an eight-day quarantine on new arrivals, but his spokesperson did not rule out tougher travel restrictions when they are due to be reviewed in three weeks’ time.

The GBP v AUD will get a spark from Australian GDP and the remainder of the week will depend on that figure and virus talk.

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