GBP/AUD Continues 7 Month High on Weak Australian Iron Ore Prices

The British pound is higher against the Australian dollar on Monday.

A rise in the number of coronavirus cases in some countries like South Korea weighed on the Aussie dollar, which had been benefiting from expectations the Asian region would be the first to recover from the pandemic.

The British pound recovered tentatively from the 3-month lows struck last week against the Australian currency.

Pound versus Australian dollar was up by 26 pips (+0.14%) to 1.9022 as of 4pm GMT.

GBP/AUD found a low for the day at 1.895 and rebounded to 1.905 before pulling back. Last week the exchange rate had slumped -2.45%.

GBP: UK return to work thrown into doubt with confusion

The UK finally began to ease some lockdown restrictions this week, but the changes were met with confusion. Prime Minister Boris Johnson changed the very clear message of ‘stay home, protect the NHS and save lives’ to a much fuzzier message in a pre-recorded video published on Sunday evening.  It left the public, businesses and trade unions uncertain about what to do next and little time to make any decisions before the new work week began.

Outside of the work setting, Johnson also said people would be able to meet one other person from outside their household in parks or other outdoors spaces if they are two metres apart. However by Monday the government was suggesting people should be wearing face masks if meeting too.

AUD: South Korea case rise undermines Asia recovery

The Australian dollar was sold amid a softer mood in financial markets, which were pulling back over uncertainty cause by a flare up in new virus cases in certain countries. The Aussie dropped as South Korea, which had “flattened its curve” saw a jump in new cases, threatening to undermine the economic recovery in the Asia-Pacific.

Domestically, Australia saw no big increases in cases but the new cases in Korea suggest the timing of reopening flights in Australia might have to be pushed back further.

There was a slight easing in the decline in business confidence in Australia from -66. Last month to -45.6 at the latest reading released today.