The British pound is higher against the Australian dollar on Tuesday.
- China warns students against study in Australia, cites racist attacks
- AUD/USD reached 11-month peak then fell below 0.70
- WHO Backtracks on “very rare” asymptomatic transmission comment
- The pound-Aussie exchange rate is +0.71% this week
GBP/AUD was up by 188 pips (+1.02%) to 1.8306 as of 4pm GMT.
Having stabilised above 1.831, the currency pair rallied nearly 200 pips to 1.83 for the first time since last Wednesday. Yesterday the exchange rate fell -0.27%
GBP: Sterling capitalises as WHO walks back guidance
The Mood in global currency markets softened on Tuesday after a big rally in global-growth-friendly currencies like the Aussie dollar and the euro. Haven currencies like the yen were preferred
Global markets have been pushing higher on the idea of the United States as well as other parts of the world reopening the economy following lockdown orders.
Some of the reason for the optimism on Monday that saw the S&P 500 index reverse its yearly loss was the idea put forward by the World health Organisation that asymptomatic transmission was “very rate” according to the experience of countries using contact tracing. On Wednesday, the WHO said it regretted that language and said asymptomatic transmission could be as high as 40% – increasing the risk that a second wave flattens reopening hopes.
AUD: China warns students not to study in Australia
T o date, the Australian dollar has brushed off the hardening rhetoric from China, including the threat of additional tariffs on Australian exports. However, with the Aussie reaching 11-month peaks today and topping 0.70 versus the US dollar, some profit taking kicked in.
The source was a warning from China’s education ministry urging students going overseas to reconsider choosing Australia, citing racist incidents targeting Asians during the pandemic. Fees generated by overseas students from China attending Australian universities are worth 12 billion Australian dollars per year.
The Australian dollar participated in a global pullback in risky assets before tomorrow’s Federal Reserve interest rate decision.
