Australia set for strong recovery in 2022 – what does this mean for AU dollar? Image credit: Supplied
So, when looking to become a successful forex trader, it’s important to conduct extensive research, taking into consideration all the factors, which could affect the value of the currencies you wish to trade.
It’s also worth producing a strategy that best suits your preferred trading style, so you can discover what is the best forex trading platform for you, before you open a position on the ever-changing market.
If you are looking to invest in the Australian dollar (AUD), for example, then you would need to keep up-to-date with relevant news and events, which could affect the currency.
With this in mind, let us take a look at how the pandemic has affected Australia’s economy, and what this means for the value of the AUD.
The World Health Organization (WHO) first stated that COVID-19 was a strain of concern, and declared the start of the global pandemic, back in March 2020. Following this, Australia has seen multiple lockdowns and restrictions, to try and keep the virus under control.
In December, Australia saw an eruption of Omicron cases – with the new variant significantly slowing down the recovery of their economy, following the peak of the pandemic.
Naturally, this has had a significant effect on the health of the country’s economy, and in turn, the value of the AU Dollar (AUD).
Whilst Australia battles to recover from the height of the pandemic, and with an average of 2850 Omicron cases in hospital on 18th January 2022, many believe that some of the hardest hit states are only just coming down from their peak.
Due to this, many businesses are facing staff shortages and disrupted supply chains as workers are forced to isolate. On top of this, tourism is at an all-time low, with the country having faced multiple lockdowns — this has heavily impacted the travel, hospitality and entertainment sectors.
Prior to the Omicron outbreak – and the lead up to the Christmas period – the economy had made a surprisingly strong recovery. Employment levels had risen faster than expected and previous lockdowns and restrictions were lifted, as well as retail sales surging for the second month in a row.
With this in mind, as the Omicron variant slows its spread and the nation returns to a bit of normality once again, that the retail, travel and tourism industries will soar – so that the economy will make a speedy recovery.
However, it will still be a couple of weeks until we know for sure if Australia’s Omicron cases have peaked, and if they are dropping significantly enough for positive change to be made.
In December, when the uncertainty of the outbreak hit, the AUD was valued at around 0.54 to the British pound (GBP), a slight decrease in comparison to 0.55 to GBP in November. At the time of writing, in January 2022, the value of the AUD stands at 0.53 to GBP.
In August 2021, in the midst of lockdowns, the value of the AUD was at 0.52, which then saw a rise in the following months. Looking back at market data from that period in time, there is hope that Australia will follow previous patterns, and continue to make a strong recovery as they come out the other side of the pandemic.
When it comes to forex trading, it’s important to keep an eye on all the different factors that could affect the health of a country’s economy. These include pandemics, political events, natural disasters, physical capital, natural and human resources, and even technology. These are also factors which can boost said economy.