The British pound is lower against the Australian dollar on Monday.
New fiscal stimulus in Australia including a subsidy on the wages of Australians affected by lockdown measures to contain the coronavirus was supporting the Australian dollar.
The pound was lower against the Aussie but losses were capped by some optimism that technical trade talks between the EU and UK would take place this week.
Pound versus Australian dollar was down by 82 pips (-0.41%) to 2.0135 with a daily range of 2.0093 to 2.0311 as of 5pm GMT.
GBP/AUD has failed on successive occasions to take out the 2.03 level to the topside and after another failure today fell back below 2.02. Last week the exchange rate was moderately lower, notching up a small loss of -0.35%.
British pound
James Slack, Boris Johnson’s spokesman said on Monday that ‘technical’ trade talks will still happen this week by phone. It’s good news for the pound that all is not lost on the trade talks after last week officials in the European Union had said they had been cancelled indefinitely.
A no deal Brexit might still be avoided while technical talks are ongoing despite Michel Barnier and David Frost the respective lead Brexit negotiators self-isolating after having coronavirus symptoms.
Australian dollar
The Aussie has been rebuilding from its position as a proxy for China during the country’s coronavirus outbreak but gains have been capped by the problems the virus poses for the domestic Australian economy. To date the fiscal stimulus was notably behind European countries and even neighbouring New Zealand. But news today suggests it is moving in the same direction.
Australia said it would commit A$130 billion over the next 6 months to support jobs and aid businesses with $1500 payments per employee. Payments will begin in May, backdating to today which could pose an issue for Australians already down at least one paycheck.
In announcing the new measures in Canberra, Prime Minister Scott Morrison and Treasurer Josh Frydenberg said that ‘crisis calls for unprecedented action and that the weeks ahead will be tougher for the economy.”
