AUD GBP Sees Strong Support with Sydney Reopening

AUD GBP Sees Strong Support with Sydney Reopening

The AUD GBP exchange rate was 0.75% higher on Monday as investors cheered the long-awaited reopening of Sydney. The country is finally emerging from tough government lockdowns, which have been in place for over 100 days. The UK economy will release employment figures today as traders absorb recent hawkish comments from the RBA.

The AUD to GBP exchange rate is trading above 0.5400 ahead of the UK employment data today.

Aussie dollar reacts to commodities and Sydney reopening

The Australian dollar rose sharply on Monday on the back of higher commodity prices, while the Aussie was also supported by the reopening of Sydney after 106 days.

Gyms and restaurants in Sydney were opened for fully vaccinated customers after nearly four months of lockdown.

Higher commodity prices in oil, aluminium, and iron ore also supported the dollar as investors move to inflation hedges.

But analysts at Westpac warned that challenges lay ahead for the Aussie, saying:

“Global activity faces a number of very significant headwinds, not least the possibility of energy shortages over the coming winter which won’t help AUD sentiment”.

“We still tend to see markets as underpricing the risks to growth from energy shortages and the coming Chinese property crises,” the analysts noted.

Evergrande was still looming in China over reports that they could miss a Monday coupon deadline. Other Beijing-based developers have seen contagion from the group’s issues and investors fear carnage in the huge US$5 trillion property sector.

High-yield Chinese bonds were hit again as fears about the sector continued to weigh on sentiment. Any damage to the Chinese economy could affect demand for Aussie exports.

Pound has employment figures ahead after rate hike support

Tuesday will bring employment data for the UK as the market assesses the recent Bank of England comments for a rate hike sooner than expected.

BoE policymaker Michael Saunders told markets to get ready for “significantly earlier” interest rate increases as inflation pressure mounts in the British economy.

The Bank of England are set to react to inflation pressures but that will continue to rely on a strong jobs market. The pound has seen strong employment with the reopening and vacancies were also at a record high.

The BoE policymakers were hesitant to discuss rate rises and saw the 2023-24 time period as the likelihood. But the bank will now move more quickly and that could see the RBA follow suit if inflation takes hold in the country.

The BoE Governor Andrew Bailey also talked over the weekend, saying that inflation is likely to head higher, and that the Bank faces a “very delicate and challenging job” with the economy in the longer -term.

The Australian economy will follow the UK this week with the latest unemployment figures from down under on Wednesday. That day will also see Westpac consumer confidence, although traders will keep in mind that these numbers were marked before the latest reopening in New South Wales.

The AUDGBP exchange rate was 0.75% higher on Monday as investors cheered the long-awaited reopening of Sydney. The country is finally emerging from tough government lockdowns, which have been in place for over 100 days. The UK economy will release employment figures today as traders absorb recent hawkish comments from the RBA.

The AUD to GBP exchange rate is trading above 0.5400 ahead of the UK employment data today.

Aussie dollar reacts to commodities and Sydney reopening

The Australian dollar rose sharply on Monday on the back of higher commodity prices, while the Aussie was also supported by the reopening of Sydney after 106 days.

Gyms and restaurants in Sydney were opened for fully vaccinated customers after nearly four months of lockdown.

Higher commodity prices in oil, aluminium, and iron ore also supported the dollar as investors move to inflation hedges.

But analysts at Westpac warned that challenges lay ahead for the Aussie, saying:

“Global activity faces a number of very significant headwinds, not least the possibility of energy shortages over the coming winter which won’t help AUD sentiment”.

“We still tend to see markets as underpricing the risks to growth from energy shortages and the coming Chinese property crises,” the analysts noted.

Evergrande was still looming in China over reports that they could miss a Monday coupon deadline. Other Beijing-based developers have seen contagion from the group’s issues and investors fear carnage in the huge US$5 trillion property sector.

High-yield Chinese bonds were hit again as fears about the sector continued to weigh on sentiment. Any damage to the Chinese economy could affect demand for Aussie exports.

Pound has employment figures ahead after rate hike support

Tuesday will bring employment data for the UK as the market assesses the recent Bank of England comments for a rate hike sooner than expected.

BoE policymaker Michael Saunders told markets to get ready for “significantly earlier” interest rate increases as inflation pressure mounts in the British economy.

The Bank of England are set to react to inflation pressures but that will continue to rely on a strong jobs market. The pound has seen strong employment with the reopening and vacancies were also at a record high.

The BoE policymakers were hesitant to discuss rate rises and saw the 2023-24 time period as the likelihood. But the bank will now move more quickly and that could see the RBA follow suit if inflation takes hold in the country.

The BoE Governor Andrew Bailey also talked over the weekend, saying that inflation is likely to head higher, and that the Bank faces a “very delicate and challenging job” with the economy in the longer -term.

The Australian economy will follow the UK this week with the latest unemployment figures from down under on Wednesday. That day will also see Westpac consumer confidence, although traders will keep in mind that these numbers were marked before the latest reopening in New South Wales.