GBP/AUD continues to follow an uptrend that started on March 4. Currently, the pair is trading at 2.0171, up 0.47% as of 7:05 AM UTC.
While both the British and Australian economies are heavily affected by the COVID-19 pandemic, there is a slight difference in the mood inspired by the two governments. UK Prime Minister Boris Johnson and his finance minister announced yesterday a series of unprecedented measures to support local businesses and households, while Australia declared emergency.
Australia Bans Overseas Travel, Economy Heading Towards First Recession in 30 Years
Earlier today, Australian Prime Minister Scott Morrison declared a “human biosecurity emergency,” calling everyone to stop all overseas travel due to the virus outbreak that could last no less than six months.
The declaration allows the government to order people to quarantine and close off cities or entire regions. Besides the overseas travel ban, the government prohibited indoor gatherings of more than 100 people. However, this doesn’t include essential services like schools, shopping centers, and public transport.
The PM said during a news conference:
“Life is changing in Australia, as it is changing all around the world. Life is going to continue to change, as we deal with the global coronavirus. This is a once in a hundred year type event.”
Australia has confirmed over 500 cases of COVID-19 and six deaths. While the number is much lower compared to other countries, the government is worried about an exponential increase.
After Morrison’s declaration, the government launched an aid package for airlines worth $430 million. Virgin Australia Holdings was forced to suspend all international flights from March 30 to June 14, while Qantas Airways reduced its international flights by 90%.
In light of the outbreak, economists expected that the Australian economy would see its first recession in about 30 years in the first six months of 2020, which will lead to a surge in unemployment.
The Reserve Bank of Australia (RBA) is expected to make a monetary policy announcement tomorrow. Economists anticipate that the central bank will cut its interest rate to 0.25% and announce quantitative easing. Last week, the RBA cut the main cash rate to 0.50% from 0.75%, which was already a record low.
