The GBPAUD interbank exchange rate has been range-bound after Friday’s session, with the price bouncing from 1.9200 to trading as high as 1.9420 on the day.
Stocks Still Uncertain Over Virus Risks as China Goes Back to Work
Friday’s big economic release was the U.S. jobs release, and despite a stronger than expected number, Wall Street closed lower on the day. In Monday trading the Shanghai Composite saw it’s sixth-consecutive positive close as traders continue to shrug off the Coronavirus fears, despite the death toll exceeding that of the SARS outbreak over the weekend.
Australian stocks were slightly lower due to the effects of China’s shutdown on mining and energy stocks. One boost for the Aussie economy is the return of Chinese to the workplace following the extended Lunar New Year holiday. Exports to China make up 38% of the Australian export market which has been affected by the recent outbreak.
Workers began returning to factories and offices across much of the country on Monday, however this added mobility may also bring the risk of further spread of the recent virus. Tesla, Daimler and Ford were among companies resuming production on Monday, with Tencent and Foxconn also getting the green light.
Hubei province, which was the centre of the virus outbreak, is one of China’s major manufacturing hubs for steel, cars and electronics. The province is still locked down with its train stations and airports shut.
UK GDP and Carney Will Drive GBPAUD This Week
The market focus for the GBD to AUD exchange rate will now be fixed on Tuesday’s UK Gross Domestic Product (GDP) figures at 09:30 GMT. Following the release of the growth figures, the Bank of England Governor Mark Carney will speak before Parliament’s Lords Committee at 15:35.
Annual GDP growth for the UK is expected to come in at 0.8%, which is a slightly lower than the 1.1.% seen in the previous quarter. Any deviation from this figure will be a driver for the exchange rate in the early part of this week. The Governor’s speech may also bring some volatility if he drops any hints about the direction of future interest rates or monetary policy. The U.K. interest rate has been stuck at 0.75% since mid-2018 and is at parity with the Aussie exchange rate.
If you’re considering buying or selling Australian dollars and would like to compare rates or know more about the factors that could impact your exchange rate, feel free to contact me directly, I look forward to hearing from you.