Australia’s politicians are taking a hard-line approach to the virus again with South Australia looking to tighten border controls with Melbourne over the two cases recently found in a hotel quarantine.
AUDGBP is trading below the 0.5600 figure as the exchange rate pauses from recent gains in sterling.
South Australia Tightening Borders
Residents from the Greater Melbourne area could be blocked from visiting South Australia today, the SA Police Commissioner has warned. The move comes after two virus cases were found at a Holiday Inn quarantine location outside of Melbourne. Authorities were looking for more confirmation of close contact with the infected parties, but wated to give residents as much notice as possible.
The move is the latest in a series of strict clampdowns by Australian authorities over minimal outbreaks. The recent news that South Africa had banned the use of the AstraZeneca vaccine over its efficacy has left Australia sweating over their only vaccine source. If the AstraZeneca vaccine was to be dropped then Australia could see these lockdowns persist as it exits the summer season down under.
Market Shrugs off Higher Consumer Confidence
The AUD to GBP shrugged off higher consumer confidence figures as the market prefers to focus on the bigger picture. The Westpac Consumer Confidence index came in at 109.1 against expectations of 107.
The Australian consumer is enjoying less strict lockdown measures than the UK, with the domestic economy operating nearer its normal levels and Western Australia’s recent lockdown only lasting around six days.
The Australian consumer has also been buoyed by strong property prices and the Reserve Bank of Australia said that the property market was more resilient than expected. The government’s HomeBuilder grant and RBA’s record low interest rates have helped to fuel demand for housing. Real estate sales data for December showed house prices hitting record highs in six of Australia’s eight capital city market, even as more are forced to work from home, with many choosing the suburbs. Australian building permits were also strong this morning with the indicator coming in at the expected 10.9% level, which is the highest since September. The figures represented a 22.8% year-on-year figure for building approvals.
Markets are focusing on the bigger picture of the virus and even if consumers are confident about the current situation, there is still trouble brewing with vaccines and potential lockdowns.
The AUD to GBP rate bounced at the 0.5550 level and this is the target for today’s strength in sterling. A move below that price would open up the potential for the pound to gain further ground to 0.5500. Get in touch using the form below to discuss an upcoming currency exchange involving Australian Dollars and the impact these factors are likely to have.