GBP/AUD: Pound weakness offer Bushfires relief for Aussie

The British pound lost ground against the Australian dollar on Thursday after Bank of England Governor Mark Carney talked down the prospects of a pickup in UK economic growth in 2020 at a speech in London. The governor’s comments outweighed weakness in the Aussie dollar, which is still under pressure from the economic damage being caused by wildfires throughout the country. More broadly markets were feeling a sense of relief after the US and Iran avoided wider conflict by stopping further military action for the time being.

GBP/AUD was lower by 72 pips (-0.38%) to 1.9004 as of 2pm GMT, offering a pullback to gains in the currency pair over the past week.

The Aussie

While its exchange rate with the British pound saw the Australian dollar appreciate on Thursday, it was largely a function of Sterling-weakness as opposed to Aussie-strength. The wildfires in Australia coupled with a trade balance below expectations saw the AUD fall or stagnate against other currencies. The Australian trade balance for November was 5800M versus 5915M expected. The wildfires are an especially hard to predict natural disaster and indications are for the moment that it is getting worse. On Thursday authorities issued more warnings and evacuation notices to citizens in areas worst hit. Softer data and the impact of the bushfires put together increase the odds that the Reserve Bank of Australia (RBA) opts to cut interest rates at its next meeting. Australian interest rates are already at the lowest on record.

The pound

The outgoing Bank of England governor made his dovish remarks during a speech in London. Governor Carney’s worries centred around  the lack of space for the Bank of England (BOE) to cut interest rates in case the expected economic recovery this year does not materialise. Economists have mostly been improving their outlook for the UK after December’s decisive election result. Interest rates have been at or near a record low through Carney’s over six-year tenure as BOE Governor. Carney indicated policymakers were debating the “relative merits of near-term stimulus” in order to give the expected economic recovery a boost. He also said that boost could include interest rate cuts or more quantitative easing (QE). is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.