The British pound is higher against the Australian dollar on Thursday afternoon on Brexit Day with the Aussie dollar extending its recent string of losses after the World Health Organisation designated the Wuhan coronavirus a global public health emergency. The currency pair is on course to end the week around 2.5% higher, a huge weekly gain by currency market standards.
GBP/AUD was higher by 122 pips (+0.62%) to 1.9595 with a daily price range of 1.947 to 1.963 as of 2pm GMT. The exchange rate spiked another 100 pips on Friday before stalling at 1.96, a level not seen since 2016.
The World Health Organisation’s (WHO) calling the coronavirus an international health emergency has added to the weekly losses of the Australian dollar. The Aussie had already hit 3 1/2-year highs against Sterling and 3-month lows against the yen and dollar on Thursday. Both the bushfires and the cut-off from trade with China are thought to be harming the Australian economy.
The official term for the WHO decision is a ‘public health emergency of international concern’ (PHEIC). WHO Director-General Tedros Adhanom Ghebreyesus said the warning is not a poor reflection on Chinese efforts to contain the outbreak, moreover a warning to other countries to be vigilant. Tedros said. “In many ways, China is setting a new standard for outbreak response.”
Australia reported a new case in Queensland involving a 42-year old Woman from Wuhan, part of the same tour group which had the first effected person in Australia. It is another sign of likely person-to-person transfer. The United States confirmed the first person-person transfer in the US and the State Department made a recommendation, contrary to that of the WHO for Americans not to travel to China.
With Brexit now just hours away, the British pound is back at its highest level against the Aussie since the result of the EU referendum. Speculation about whether Britain will leave the EU ended after the emphatic election victory of Brexit-supporting PM Boris Johnson. For that reason, the actual exit of the UK from the EU is having no effect on currency markets.
