GBP/AUD Exchange Rate Subdued as UK’s Coronavirus Measures Found Lacking
The Pound to Australian Dollar (GBP/AUD) exchange rate is struggling to find support this morning as markets express their concern over the UK’s government’s approach to the Coronavirus.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.9882, virtually unchanged from this morning’s opening rate, and down from a high of AU$2.0215 struck during the Asian trading session.
Pound (GBP) Tempered by UK Government’s Approach to Coronavirus
The Pound (GBP) is struggling to capitalise on the weakness of some of its peers this morning as the UK government comes under growing criticism over its coronavirus measures.
Unlike most other European countries, the UK is still yet to start closing schools or start restricting public gatherings, let alone putting its citizens into quarantine like Italy.
"The government seems complacent"
Labour leader Jeremy Corbyn says he has written a letter to the prime minister asking why advice on coronavirus "is different to that given in almost every other European country"https://t.co/FzdphI1mdR pic.twitter.com/73NLoYmDKR
— BBC Politics (@BBCPolitics) March 15, 2020
The UK’s approach also appears to be in direct contradiction with the advice given by the World Health Organisation (WHO).
Observers seem particularly concerned that the UK government has resigned itself to the fact most of the population will contract the disease and trying to build herd immunity.
Singapore’s national development minister, Lawrence Wong said:
‘I think the UK has been most public in acknowledging that there’s no point containing and they are simply now at the phase of trying to delay the spread.
‘So if there is no deliberate effort to contain then we anticipate that the numbers of infected cases in these countries will rise even more sharply in the coming days or weeks.’
GBP investors also fear that despite the UK government’s attempts to negate the impact on day-to-day life the country is still on track to fall into a recession this year.
Australian Dollar (AUD) Struggles in Risk-Off Trade
Meanwhile, trade in the Australian Dollar (AUD) is mixed this morning as the ongoing panic surrounding the coronavirus crisis continues to stoke volatility in currency markets.
With a global recession now looking all but inevitable, investors are unsurprisingly nervous, greatly limiting demand for the risk-sensitive ‘Aussie’.
However in spite of this the Australian Dollar hasn’t been completely written off yet, with the currency finding some fleeting support in the wake of the Federal Reserve’s move to cut interest rates to near zero.
GBP/AUD Forecast: RBA Minutes to Bolster Expectation for Additional Rate Cuts?
Looking ahead, the Pound to Australian Dollar (GBP/AUD) exchange rate may trend higher in overnight trade with the publication of the minutes from the Reserve Bank of Australia’s (RBA) March policy meeting.
Having cut interest rates to a record low earlier this month in an attempt to limit the economic impact of the coronavirus, analysts expect the minutes to highlight appetite for further cuts if the coronavirus situation continues to deteriorate.
Meanwhile, the publication of the UK’s latest jobs report may offer some modest support to the Pound on Tuesday.
Economists forecast tomorrow’s figures will show wage growth climbed back above 3% in January as part of the post-election bounce.