GBP/AUD Recovers from Monday Losses, Trades at 1.9607

GBP/AUD turned bullish on Tuesday, after losing 0.29% yesterday.

Currently, one British pound buys 1.9607 Australian dollars, up 0.16% as of 7:00 AM UTC.

GBP/AUD is trading close to the highest level since February 3, which coincides with the highest since 2016.

GBP/AUD – Coronavirus Affects Australian Budget

The Aussie continues to suffer from the impact of the coronavirus outbreak in China and beyond its borders. While the rate of infection seems to slow in mainland China, the virus is rapidly expanding worldwide, including in South Korea, Italy, and Iran.

Earlier today, Australian Prime Minister Scott Morrison said that his government might be unable to deliver the country’s first budget surplus in over 10 years due to the economic damage caused by the virus. Thus, he might be forced to break a promise made in the election campaign.

Initially, the government anticipated a budget surplus if 4.71 billion AUD and revised that figure down to a surplus of 5 billion AUD. However, a further revision might cut any surplus at all. Morrison said:

“Who thought there was going to be a coronavirus epidemic when the budget was released last May. Of course no-one did. These are unknown global shocks.”

Australia’s Treasurer Josh Frydenberg stated that the government was still measuring the impact of the epidemic, but it would be larger than the recent bushfires that hit the east coast. The bushfires are estimated to have cut up to 0.4% from the three to March.

BoE More Positive About Economy

Elsewhere, the British economy shows clear signs of revival after Prime Minister Boris Johnson secured a major victory in the December election. Yesterday, Bank of England (BoE) chief economist Andy Haldane said that the Brexit uncertainty that used to damage the economy had lifted. Nevertheless, it’s early to say that business investment is returning at full capacity, but companies are more willing to invest.

“Some early stage signs in surveys suggest there could be a stirring in the undergrowth when it comes to company investment plans,” Haldane said.

However, despite increasing confidence, a degree of uncertainty remained as the UK is warming up for the trade talks with the European Union.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com 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 currencylive.com do not represent our views.