The British pound is lower against the Australian dollar on Friday afternoon despite economic data that some might have thought precluded a cut to UK interest rates this month. An announcement from the World Health Organisation that the coronavirus outbreak in Wuhan China is not an international emergency helped cap selling in Asian currencies.

GBP/AUD was lower by 28 pips (-0.16%) to 1.9137 with a daily price range of 1.91 to 1.922 as of 2pm GMT, with the currency pair stalling beneath weekly highs.

The British pound

Flash PMIs released on Friday that well exceeded consensus expectations painted the picture of a UK economy on the rebound in January. The country had been mired in political uncertainty in December, so a resounding business-friendly election result has helped turn things around. The UK manufacturing sector is still in contraction but only just while services, which make up the bulk of the UK economy are now in a healthier state of expansion.

The pound has already made solid gains this week, up over 200 pips and 1.2% against the Australian dollar so a kneejerk reaction higher to the data ran into end-of-week profit taking.

Expectations for an interest rate cut by the Bank of England next week have been reduced through the week after data showed UK the unemployment rate had fallen to the lowest on record. The PMI data released on Friday adds to the case to keep interest rates on hold. However, slowing inflation and the longest run of monthly retail sales contractions on record might be good enough reason for some policymakers to want to err on the side of safety and lower interest rates even further.

Depending on the data you look at, the UK monetary policy decision looks likes it is on a knife edge and markets are pricing a 45% chance that rates are cut next week.

The Australian dollar

By contrast, market expectations for an RBA rate cut have sat around 30% since the much better-than expected Australian employment data this week. While the WHO deems the coronavirus under control, the Australian dollar is less at risk of the kind of selling it saw this week. 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.