GBP/AUD has just updated the highest level in over three years on Friday. The pair is currently trading at 1.9548, up 0.39% as of 6:40 AM UTC. Yesterday, the price gained an impressive 1.21% after the Bank of England announced that it had left the interest rate unchanged at 0.75%.
The Aussie is experiencing the worst weekly loss in months, as the economy has been struggling with the worst fire season in years. On top of that, the outbreak of a new coronavirus in China is affecting trade and tourism, as the Asian country is Australia’s largest trade partner and source of tourists.
The World Health Organization (WHO) yesterday declared a global emergency, warning that the new strain of the virus could spread to nations with weaker health systems.
ANZ economists anticipate China’s economic growth to slow to 5% for a while. Elsewhere, UBS economists estimated that Australia’s would lose no less than A$1 billion as the services export is hit during the two-month halt on China package tours.
Elsewhere, the sterling remains bullish after the central bank’s decision to maintain the rate, while investors priced a 50% chance of a rate cut.
Also, today marks the day when the UK is finally leaving the European Union (EU). The historic day will be celebrated “respectfully,” UK Prime Minister Boris Johnson said. Brexit is Britain’s most important geopolitical decision since World War Two, causing a great loss for the European bloc.
Johnson will hold a speech later today, during which he will say:
“The most important thing to say tonight is that this is not an end but a beginning. This is the moment when the dawn breaks and the curtain goes up on a new act. It is a moment of real national renewal and change.”
The pound is also supported by increasing confidence among British consumers. Market research firm GfK stated that its consumer confidence index rose to -9 in January, from -11 in December, in line with analysts’ expectations. This is the highest level since last September.
Joe Staton of GfK commented:
“The latest measures concerning our personal financial situation are encouragingly healthy and positive, as is the improvement in our view of the wider economic picture for the UK.”
