The AUDGBP exchange rate was lower on Monday and trading below the 0.5300 level again as the pound see support from the Bank of England’s tapering talk last week. The pair saw yearly lows recently at 0.5272 and is at risk of going back there again.
The AUD to GBP pair trades at 0.5290 and the Aussie dollar has Westpac Consumer Confidence today.
Treasury predicts a bounce in economy
Australian Treasurer Josh Frydenberg said the Australian economy will bounce back like it has done in the past.
The statement comes as millions of the country’s citizens remain locked down around the country, including the largest cities of Sydney and Melbourne.
“There is light at the end of the tunnel,” Frydenberg said.
“We are there providing significant economic support in partnership with the state governments.”
The current Sydney lockdown is said to be costing the Australian economy around A$180 million a day, which exceeds the previous Victorian lockdowns, at A$100 million daily.
Mr Frydenberg said the expense of the lockdown is why the federal government is “providing an unprecedented amount of economic support to those people in need”.
The Australian economy will get a chance to show some resilience in today’s Westpac consumer sentiment release, but it has been declining since April and the lockdowns will only add to the negative feelings for the Australian citizens.
Abbot rattles China’s cage with Indian comments
Former Australian President Tony Abbott was in India for trade talks and risked a backlash from China over comments he made.
Abbot said the talks offered another step for the “democratic world’s tilt away from China”.
Australia’s trade envoy also said the “answer to almost every question about China is India. With the world’s other emerging superpower becoming more belligerent almost by the day, it’s in everyone’s interests that India takes its rightful place among the nations as quickly as possible”.
“Because trade deals are about politics as much as economics, a swift deal between India and Australia would be an important sign of the democratic world’s tilt away from China, as well as boosting the long-term prosperity of both our countries,” Abbott said.
The comments in a newspaper opinion piece won’t help the tense relations between China and Australia in recent months. China is Australia’s largest trading customer, but relations have been strained since Australia backed calls for the country to face investigations into the emergence of the coronavirus.
The Aussie dollar versus the pound has been on a downward spiral since June as the virus returned to Australia and the government continued its aggressive approach to lockdowns. The country’s rebound was the envy of the world, but that has now been derailed by the virus variant surge in the country.
The pair will get another test on Thursday as the UK sees GDP updates for the second quarter. The BoE has expected 5% for the economy, which would leave it 4% lower than before the virus.