The British pound was higher against the Australian dollar on Friday with the Aussie dollar tracking a big slide in the New Zealand dollar affectionately known as the kiwi after New Zealand reported its first case of the coronavirus.
GBP/AUD was up by 118 pips (+0.60%) to 1.9727 with a daily price range of 1.9575 to 1.983 as of 3pm GMT. The currency pair rallied throughout the day to strike 1.98 before giving up over 100 pips in the afternoon. On a weekly basis the exchange rate was up 0.73%.
GBP unstable amid trade deal and coronavirus uncertainty
Comments made by Governor Carney have raised fresh doubts about the recovery of the British economy as well as Prime Minister Boris Johnson’s plan to level up across the country with increased government spending in the North of England. Carney told Sky News that the Bank of England might need to lower its economic growth forecast because of the coronavirus saying it is “hard to be precise about the magnitude and very importantly the duration” of the economic harm from the virus” but that “the direction is down” vis-à-vis its effect on the economy.
Japanese officials reported that a passenger who died on the quarantined Japanese cruise ship was the first British citizen to die of COVID-19. The timing of the coronavirus is brutal for the British economy which still faces the uncertainty of trade negotiations with the EU but where confidence had just started to rebound in the aftermath of the general election.
The British pound – New Zealand dollar exchange rate reached new highs since the EU referendum after it was reported New Zealand has its first case of the coronavirus. A man is 60s who was returning from Iran was found to have contracted the disease according to New Zealand’s Ministry of Health. As the two leading Pacific economies outside of Japan, Australia and New Zealand’s currencies tend to move in lockstep.
Even without its first case, the New Zealand dollar as well as the Aussie dollar were likely to come under more pressure as the price of commodities like oil, not to mention global stocks markets tumbled.
