AUD GBP Erases Earlier Losses to Point Higher

AUD GBP Drops as Australian Business Activity Disappoints

The AUD GBP exchange rate erased some early losses in a quiet trading day which has provided support for the pair at the 50-day moving average. The Aussie dollar could look to make further gains as the Australian economy moves closer to a long-awaited reopening.

The AUD to GBP exchange rate is trading at 0.5345 and a recent rally in the pair failed ahead of the 0.5400 price level.

No international tourists until 2022, says Aussie PM

Hopes of a full reopening were dealt another blow after Australian Prime Minister Scott Morrison said that international tourists won’t be welcome in the country until 2022.

The Prime Minister announced that the country will prioritise skilled migrants and students ahead of tourists as he outlined plans for lifting the draconian lockdowns in Australia.

Morrison said tourists will only be allowed to return to Australia after the country fully vaccinates 80% of its population aged 16 or above, which is expected to happen this week.

The news comes after Morrison also said that, from November 1st, fully vaccinated Australians will be allowed to travel abroad freely, having been banned from leaving the country since March 2020.

“We will get to international visitors as well, I believe next year,” Morrison said.

“International tourist arrivals have to be part of the plan,” said Daniel Gschwind, chief executive of the Queensland Tourism Industry. “Even if they’re not the first priority, we’d like to see how this is going to be worked out. There are many businesses that are just hanging on.”

Despite the country’s economic woes, the RBA decided to stick to its current record low interest rates and bond-buying pace with the bank expecting a recovery in the jobs market once restrictions are lifted in the country.

Pound sterling still weighed by gas prices worries

Traders are giving the Aussie dollar some extra support as the pound sterling remains weighed down by fears over a winter supply crunch in the energy market. Dutch and UK gas price futures have marched higher this week to record levels, but there is hope that Russia will ease concerns with a production increase.

President Vladimir Putin suggested that an increase in production via the Ukraine would help supply to record levels this year. His comments pulled the price of UK natural gas for delivery in November back down to 267p per therm. That marked a pullback of almost 9% on the day, after a surge of almost 40% in the morning.

Putin also added that Europe was to blame for the current energy crisis. “They’ve made mistakes,” Putin said in a televised meeting with Russian officials.

He said that one factor driving the current prices was the termination of “long-term contracts” in favour of the spot market.

“It turned out, and today this is absolutely obvious, that this policy is wrong,” Putin said.

The surge in wholesale gas prices in the UK has wiped out many of the smaller energy suppliers who didn’t hedge their prices.