Pound Higher Against the Australian Dollar as Traders Digest Data and Asian Markets Slip

Australian Dollar Forecast: AUDGBP gains by 10% since April

The Pound was up 0.32% early on Thursday as traders continued to digest the recent mix of data and world news flow.

Without any fireworks in the U.K. growth data, volatility is measured and the GBP v AUD exchange is trading at the 1.9300 level. A strong close for the day would be a sign that the recent 1.92-9250 level has provided some support and there may some follow-through ahead.

Coronavirus Still Lurks in the Background

The Shanghai Composite index of Chinese stocks saw its first losing day in eight as the death toll moved sharply higher. In the Hubei Province, a rise of 242 fatalities brought the official figure to just above 1,300. Investors are still assuming that the virus has been contained but today’s slight pullback is a sign that caution still exists as we approach another weekend.

The Australian government has announced that it will extend its travel ban on those who have travelled through China. Initially set for 14 days, the extension is for another week and Australian citizens and their family are exempt from the ruling. One of the harder hit demographics will be travelling Chinese students, many of home returned home for the Lunar New Year celebrations. Chinese students contributed $34bn to the Aussie economy last year and the ban has been forecast to cause $8bn in losses to the economy.

Australian Shares Slip and May Hint at a Top

Australia’s S&P/ASX 200 index slipped almost 0.5% on Thursday and this is in line with the market behaviour in China. For Aussie shares the level is significant as it is retreating from the all-time highs near 7150.

Time will tell whether this is a pause in the uptrend or a more important turning point for markets. Australian investors are certainly optimistic despite the recent double threat to the economy of the bushfires and the Coronavirus.

Gold was 0.5% higher alongside other commodities, which this may be a sign that safe destinations for investment are coming back in favour. In terms of the pound v Australian dollar forecast, any spread of virus cases in either of the countries will impact on the exchange rate in a similar fashion. The next significant data for the pair is next week’s RBA Minutes of the recent policy meeting, and consumer price inflation out of the U.K.

For more information on AUD/GBP exchange rates for an upcoming currency transfer, please contact myself, Lauren Buckner, using the form below.