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Australian state governments continue to lockdown states, and parts of states, as they try to deal with more COVID-19 variants, including the recent Delta Variant.
States which have been in, and gone in and out of lockdown, include Victoria, South Australia, Queensland and large parts of New South Wales.
Until recently, strategies employed by governments, including border closures, quarantine programs, and snap lockdowns, have helped keep the number of cases low.
But the highly contagious Delta variant has challenged these defenses in the past few months.
A recent outbreak in Sydney, Australia's largest city, has infected thousands of people, despite a long lockdown.
Lockdowns are expected to continue until a large percentage of Australian residents are fully vaccinated.
Residents fear that these lockdowns might extend past September, which might negatively impact the country's economy and the Australian Dollar.
Australia's current economic condition
The Australian dollar has experienced a long-term upswing in value despite the recent lockdown measures and impacts of COVID on the country's economy.
Nonetheless, this might change very soon as reports indicate that Australian household spending recently recorded its largest monthly decline this year following continued lockdowns.
The preliminary retail sales dropped 1.8 per cent in June, from one month earlier, compared to what economists had estimated at a 0.7 per cent decline.
According to Ben James, an official at the Australian Bureau of Statistics, June's fall in turnover was due to the impact of the lockdowns across multiple states. Other states and territories experienced interrupted trade due to mini-lockdowns, as well as reduced mobility between states with tightening of border restrictions.
Additionally, the slow vaccination rate and lockdowns in the first half of 2021 have had a significant negative impact on the Australian Dollar (AUD).
Nonetheless, the Westpac Bank of Australia remains bullish on the trend of the AUD, and it expects a solid net USD$0.08 surge in the Australian Dollar from its current level shortly.
Fewer lockdowns and an effective vaccination program is expected to positively impact the AUD. The vaccination effort is expected to peak by November, which will help open up the Australian economy.
With an active economy, the AUD might surge towards the end of 2021 as consumer activity returns to normal.
Relationship between Australia and China, and the impact on their economies
Economic growth in China has made the country a vital trading and investment partner for Australia. China's success has increased Beijing's confidence in asserting its position in regional and global affairs.
Global geopolitical and strategic concerns have traditionally dominated the Australia-China relationship.
However, both countries have built up a range of common bilateral and regional interests since the 1980s, including strong economic ties.
Nonetheless, this relationship has continued to worsen since that period for many reasons.
Details about Australia's lockdown and its plans for the economy
In July the state of Victoria recently ended the state-wide lockdown after curtailing the spread of the virus, while neighboring state New South Wales, decided to add a four-week extension of restrictions.
Residents of this state were ordered to stay at home, as schools and businesses remained closed. Overall, movement among residents was restricted, and only essential services, such as individuals administering vaccinations, were allowed to move about.
These measures have raised the prospect of the country recording its second recession, according to Treasurer Josh Frydenberg.
Frydenberg added that Australia's AUD$2 trillion economy is expected to shrink in the latest GDP figures, with lockdowns costing about AUD$300 million daily.
The solution, according to Westpac, is to roll out vaccinations faster and more efficiently and ease lockdown measures to maintain the country's economy and boost the Australian Dollar towards the end of 2021.
The lockdown measures imposed in several states in Australia have negatively affected the Australian Dollar.
Figures reveal that household spending has dropped significantly as businesses remained closed and movement restricted. It remains to be seen how the next steps will affect the country's economy shortly.