The Australian dollar is lower against the US dollar on Monday afternoon with investors dumping the Australian currency in reaction to the potential damage being done to the Asian region by the spread of the coronavirus in China. Stock markets in China, where the coronavirus is concentrated, as well as Hong Kong, South Korea and Australia are closed. On the flipside the US dollar is winning thanks to its haven appeal in times of uncertainty.

AUD/USD was lower by 57 pips (-0.84%) to 0.6773 with a daily price range of 0.677 to 0.682 as of 2.30pm GMT. The exchange rate started the day well into the red and currently sits near its lows of the day as well as six-week lows.

The Aussie

As the second most liquid currency in the Asian region (after the Japanese yen) and especially given Australia’s close trading relationship China, the Aussie is being used as a proxy for China. Investors want to sell out of Chinese assets and those linked to China but that has been limited by the holiday closure of several stock markets.

The Australian currency had stabilised in the middle of last week when it appeared the coronavirus was under control. But fears that authorities might not have the virus as well contained as first suggested by the WHO has seen heavy selling since Thursday.

Of course investors want to see the virus contained and more deaths prevented but the measures taken by the Chinese government to prevent the spread is also likely to hit economic growth.

According to High Frequency Economics, a data analysis firm for institutional investors, “China generates almost one third of world GDP growth. A single percentage point off China’s GDP growth rate would reduce world GDP by the equivalent of $150 billion”

The US dollar

The dollar has appeal as a haven, but the United States also has a unique advantage when avoiding risks associated with China. Thanks to its new trade deal with China, the United States economy should be relatively insulated and is helping keep a floor under the US dollar. 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.