The Aussie continues to fall foul of global sentiment towards the coronavirus outbreak which took another turn for the worse after a big increase in the number of cases in South Korea.
GBP/AUD was up by 138 pips (+0.71%) to 1.9603 with a daily price range of 1.9452 to 1.9623 as of 3.30pm GMT.
GBP/AUD added to an early move higher, adding gains throughout the day before finding resistance near 1.96. The daily gains add to a weekly tally of
AUD couldn’t follow through on a rebound and prolapsed back to levels last seen early in the month
The softening in Australian unemployment figures has economists predicting when not if the Reserve Bank of Australia will cut interest rates. Analysts at ANZ said “Weakness in the AUD may provide some offsetting stimulus, but we think an RBA rate cut in Q2 remains more likely than not.”
Little explanation for the weakness in the Australian dollar can be found in the price of gold. The two assets at one time were highly correlated because of Australia’s large gold and other metal exports. However the correlation has completely broken down with gold hitting a 7-year high this week while the Aussie struck its lowest in a decade.
The British pound
Improved PMI data saw economist increase estimates for first quarter growth in the United Kingdom and encouraged Sterling buyers to come out of the woodwork on Friday. All week traders have taken any bounce in the pound after better data as any opportunity to fade the currency in expectation that trade uncertainty means the trend will be lower. Markit manufacturing PMI lifted to 51.9, up from the 50 in the previous month and beat estimates of a contraction to 49.7. There was a small decline in the service sector however it remains in healthy expansion at 53.3.