The AUDGBP exchange rate was lower by -0.16% on Wednesday with the pair potentially looking to test the week’s low. A bounce on Tuesday kept the wolves from the door, but a bearish close on Wednesday could see another push towards the 0.5275 lows.
The AUD v GBP was trading at 0.5340 with both economies still resisting restrictions.
Australian PM to meet with cabinet amidst higher cases
Australia saw another rise in virus cases on Wednesday with hospitalizations and long queues at testing centres as it continued to see a rapid spread of the Omicron variant in most states.
The country logged more than 64,000 cases, up from 47,000 a day earlier, while the Prime Minister Scott Morrison met virtually with the national cabinet. The state and territory leaders will now decide how to respond to almost daily case records with continued pressure on hospitals.
New South Wales, the country’s most populous state, saw a record 35,054 new cases on Wednesday as it awaits the arrival of 50 million rapid antigen tests ordered by the state government.
In the UK, Boris Johnson has confirmed that his Plan B restrictions will be in place for another three weeks to January 26th.
Making the announcement in the House of Commons earlier, Mr Johnson also said the government would not be bringing in new measures.
“In response to the latest data the cabinet agreed this morning that we should stick with Plan B for another three weeks with a further review before the regulations expire on 26 January,” he said.
“I know some might therefore ask whether this means we can now do away with measures altogether, but I’m sorry to report that hospital admissions are rising rapidly, doubling around every nine days,” he added.
Analysts see RBA dropping stimulus measures by February
The Reserve Bank of Australia’s quantitative easing policy could be unwound by February, according to analysts. The policy may be hurting the long-term interests of the economy, one of the nation’s leading economists. Another former RBA official has argued the institution has failed the country and become more focused on charts than policy.
In separate papers, Macroeconomics chief economist Stephen Anthony and Centre for Independent Studies chief economist Peter Tulip have both criticised the RBA’s policy measures.
Mr Anthony, a former treasury official said quantitative easing policies were useful short-term measures in a crisis, but their ongoing use had distorted global markets.
He said the use of quantitative easing, alongside ultra-low interest rates and huge government spending was distorting investment decisions.
“Central banks are inadvertently guiding resources to lower-value activities distorting prices and risk,” he said.
“When capital flows towards bad bets and away from safer bets, we all suffer the consequences. Monetary easing effectively subsidises business activities that are not socially desirable (but are privately profitable) at the expense of preferable investments. All this sounds very bad for dynamic efficiency and capital formation through time,” he said.
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