AUDGBP Lower with New Sydney Lockdown

AUD GBP Lower as Traders Await RBA Meeting

The AUDGBP exchange rate was lower after Sydney was subjected to a new two-week lockdown. Australia has had its borders closed for months but is reporting cases of the Indian variant.

AUDGBP is trading at 0.5450 after the Aussie saw a bounce at the 0.5400 level last week. That gave Aussie dollar bulls some hope for a rebound and the lockdown hasn’t hurt the dollar too much as the UK has its own virus issues.

Sydney back in lockdown

A two-week lockdown has been imposed in Sydney after a cluster of Indian variant cases was reported in triple figures.

Australian citizens have been warned they are facing the most “serious crisis” in the virus pandemic since last February/March as officials seek to contain new outbreaks of the virus.

Australia’s COVID-19 committee was due to hold an emergency meeting on Monday over rising case numbers, including the Indian variant across the country.

Authorities in New South Wales are saying that infections will increase “considerably” after the state recorded 18 new local cases.

“We have to be prepared for the numbers to bounce around and we also have to be prepared for the numbers to go up considerably,” New South Wales Premier Gladys Berejiklian said.

Health policy adviser Bill Bowtell added: “We really face the most serious crisis in the COVID pandemic since the early days in February-March last year.”

The northern city of Darwin has also entered a two-day shutdown after a gold mine worker tested positive for the variant. Traders are concerned about the lower vaccination uptake in the country.

UK restrictions to end on July 19th

The pound got a boost on Monday after new Health Secretary Sajid Javid confirmed that the latest lockdown will end on July 19th.

The delayed final part of four steps will see a variety of changes. Wedding and funeral restrictions will be lifted, alongside measures on social gatherings. The planned easing will also see restrictions will also see household mixing rules lifted for hospitality venues.

The statement by the health minister can’t be fully trusted after recent backsteps and there is no explanation on the current rise in virus cases. The UK has seen a much higher vaccination rate and that should help the country to exit the current restrictions.

Tomorrow also sees the release of GDP figures for Q1 in the UK but it’s a final reading and may not alter the outlook much for the Aussie dollar and pound exchange rate.

The AUD to GBP exchange rate will look to capitalize on the bounce from 0.5400 but the economic calendar is light this week and virus issues will dominate. The UK is seeing cases in the thousands but Australia’s government imposes lockdowns with a handful of cases and that is a weight for the Aussie going forward.