GBP/AUD Exchange Rate Buoyed in Skittish Trade
The Pound Australian Dollar (GBP/AUD) exchange rate is on the rise this morning, as the ‘Aussie’ comes under pressure amidst growing fears of the coronavirus.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.9964, up nearly 0.9% from this morning’s opening rate.
Australian Dollar (AUD) Tumbles in Risk-Off Trade
The Australian Dollar (AUD) is on the retreat this morning as a prevailing risk-off mood in markets takes its toll on the ‘Aussie’.
Investors are shunning risk-sensitive assets as concerns over the coronavirus pandemic continue to mount.
There latest development that is sending shockwaves through markets is Donald Trump’s announcement of a European travel ban.
Neil Wilson, chief market analyst at Markets.com comments:
‘Instead of his late-night presidential address calming things, it only fanned the flames raging in markets. The president has gone from calling it a Democrat hoax to banning all travel from Europe in just 12 days.
‘A 30-day European travel ban didn’t allay market fears that this virus is spreading very fast and will wreak economic havoc. Indeed, it actually makes the economic harm greater, at least in the short term.’
At the same time, it appears that Prime Minister Scott Morrison’s announcement of an AU$17.6bn stimulus package has failed to inspire the Australian Dollar, with most AUD investors still certain the Reserve Bank of Australia (RBA) will need to cut interest rates again next month.
Pound (GBP) Capped as UK Prepares to Step Up Coronavirus Response
Meanwhile, the Pound’s gains against the Australian Dollar (AUD) this morning appear to have been capped somewhat as Boris Johnson prepares to chair a meeting of the emergency ‘Cobra’ committee to discuss the government’s response to the UK’s coronavirus outbreak.
As cases continue to rise at an alarming pace and in light of the World Health Organisation (WHO) declaring a pandemic, the government is expected to move from its ‘containment’ phase to the ‘delay’ phase.
This is likely to involve the closure of schools and restriction of public events as well as asking people to work from home wherever possible.
Such measure are of course likely to cause considerable disruption to the UK economy and as such will likely negative impact the Pound.
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