The AUDGBP exchange rate was driving for the early-December lows at 0.5280 as traders see UK interest rates and economic strength winning over the Aussie economy. The UK Prime Minister Boris Johnson will meet cabinet members today to discuss coronavirus data, but recent comments have tilted towards no further restrictions.
The AUD v GBP was trading at 0.5330 with the support from December coming it at 0.5275.
Australian dollar hurt by hospitalisation data
Australian coronavirus cases soared to a pandemic record on Tuesday as the Omicron variant continued to spread through much of the country. However, hospitalisation rates are the issue with lengthy wait times at medical centres.
The country previously used a system of constant testing, tracing and lockdowns to stop outbreaks has now seen over 47,000 new infections, up nearly a third on Monday’s number. This is also happening despite a high vaccination rate amongst adults.
Political leaders have pointed to the vaccination rollout and fewer deaths, compared to other countries, but hospitalisations are higher than at any other time in the pandemic.
The country has seen friction between different states in recent months and that could see some restrictions imposed, even if they are not at the country-wide level and that is weighing on the Australian dollar.
Numbers in the states are rocketing with Queensland recently seeing six new cases; on Tuesday it recorded more than 5,600.
After nearly two years of pushing for widespread testing, the authorities now want asymptomatic people to avoid clinics, where high volumes have pushed result turnaround times to several days.
The day ahead will see the Reserve Bank of Australia release its chart pack, which will guide traders on the economic outlook. The current consensus is for three interest rate hikes in the year ahead, but that is at odds with the RBA projection for a 2024 rate move.
UK seeing post-Brexit success with South Korea
British exporters are currently enjoying a post-Brexit boom with South Korea after a £620million surge in trade. The news backs Prime Minister Boris Johnson’s promise that the Government will go “further and faster” to maximise the opportunities of Brexit.
International Trade Secretary Anne-Marie Trevelyan said there was “huge demand” for British goods and services in the South-East Asian powerhouse with exports surging 9% in the last year.
Ms Trevelyan said: “As part of our Global Britain agenda – we are helping businesses capitalise on the huge demand for British goods and services in South Korea. As the UK eyes future growth opportunities in the Indo-Pacific, we plan to strengthen trade ties with the region’s biggest economies like South Korea.”
“We have already negotiated the world’s most ambitious digital trade deal with Singapore this year, and we’re on track to join the CPTPP next year, a huge free trade area with a combined GDP of £8.4trillion.”
Boris Johnson was due to meet with ministers on Tuesday but the expectation was for no further measures with late-January said to be the peak in Omicron cases.
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