AUD GBP Higher as Lockdown Fears Grip Europe

AUD GBP Higher as Lockdown Fears Grip Europe

The AUD GBP exchange rate was higher on Thursday as it recovered from steep two-day losses on the latest UK economic data. Higher inflation and stronger employment figures put the pound sterling on the front foot. Melbourne has now loosened its restriction further, but there are fears over a return to restrictions in the UK as it logged over 46k cases with Europe pushing new lockdowns. Experts have said there is less risk for the UK but traders are still cautious.

The AUD GBP exchange rate was trading at 0.5390 as traders take profits on the pound.

Lockdown fears force sterling bulls to pause

The pound sterling saw two strong days of gains against the Australian dollar, but profit-taking has occurred towards the end of the week.

As Melbourne eased its restrictions further, the UK is seeing rising cases and there was talk of the UK following Austria and Germany with a lockdown for unvaccinated citizens.

The latest case numbers in the UK are above 46,000 and the winter will still get colder. Germany and other European nations are seeing another surge in cases and that adds a layer of concern to the pound sterling outlook.

However, Professor Neil Ferguson, the epidemiologist whose modelling started the first lockdown last year, has said: “I think it is unlikely we will get anything close to what we had last year, that catastrophic winter wave.”

He told BBC Radio 4’s Today programme: “We might see slow increases as we did in October, for instance, but not anything as rapid as we saw last year,” he added.

“We don’t fully understand the drivers of what’s causing the increases in places like Germany though where cases numbers have gone up very quickly. It may be waning immunity from the vaccines – they haven’t rolled out boosters as quickly as we have,” Ferguson said.

Australian job vacancies double supply problems

Australia is seeing a skills shortage with the number of job ads on Seek for hospitality and tourism positions doubling in a month for one state.

Seek’s managing director for Australia and New Zealand, Kendra Banks, said recruiters were finding it ‘challenging’ as businesses compete with each other for staff.

‘Despite site visits remaining high, there is still a hesitancy, particularly with customer-facing roles, with people not wanting to move jobs just yet,’ Ms Banks said.

Her statement contradicts that of the Reserve Bank Governor Philip Lowe, who said that unlike the US, Australian workers were more likely to accept customer-facing jobs.

The hospitality sector has been hit by constant lockdowns and upheaval, alongside the ever-changing rules and regulations. That is forcing many to look to other careers in order to find more job stability.

‘The result has been a significant shock to labour supply in the US. This has not been the case in Australia,” Lowe had said.

The closure of Australia’s borders throughout the pandemic also ended migration and work holiday visitors.

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