GBP/AUD is moving sideways in early trading on Monday, though the pair is still following an uptrend that started on March 4. Currently, one British pound buys 2.0103 Australian dollars, up 0.03% as of 7:30, thought pair negative a few minutes ago.
Both the British and Australian economies are struggling with the impact of the coronavirus outbreak, which doesn’t seem to slow down.
Australian Government Imposes Closures of Pubs, Casinos, Cinemas
Yesterday, Australian Prime Minister Scott Morrison required many businesses, including those who manage casinos, pubs, and cinemas, to close their venues from Monday to fight the COVID-19 after many people ignored previous warnings and continued to gather in large numbers.
As of Sunday, the number of cases surged to 1,098, while the death toll rose to 7.
Restaurants and cafes will be limited to take-away and delivery services, the PM said. He added:
“I am deeply regretful that those workers and those business owners who will be impacted by this decision will suffer the economic hardship that undoubtedly they will now have to face.”
Today, the Reserve Bank of Australia (RBA) bought $2.3 billion in local government bonds. The move is part of its recently announced quantitative easing measures to maintain the short-term yields around the interest rate of 0.25%.
On Friday, the central bank bought about $3 billion on its first day of the bond-buying programme.
Despite the measures, some industries will continue to suffer. For example, recent data shows that Australia’s housing market is about to experience another decline caused by social distancing measures.
Property consultancy CoreLogic said that preliminary auction results showed that the clearance rate had tumbled to 61.3% last weekend, from over 70% in recent weeks. Also, the auction withdrawal rate in Australia’s capital cities jumped to more than 8% from about 5%. CoreLogic explained:
“In all likelihood we will see more vendors choosing to withdraw from the market until confidence and selling conditions improve.”
The housing market experienced a downturn in mid-2019. Still, it had managed to recover and even become one of the few flourishing sectors at the start of this year, when the economy was measuring the impact of one of the worst fire seasons in Australia’s history.