GBP/AUD Exchange Rate Flat Following UK GDP
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning as markets react to the UK’s latest GDP figures.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.9259, slightly down from today’s opening rate.
Pound (GBP) Subdued as UK Economy comes to a Standstill at the end of 2019
The Pound (GBP) is flat this morning as the UK’s latest GDP estimate revealed the UK economy stagnated at the end of last year.
According to data published by the Office for National Statistics (ONS), UK GDP slowed to 0% in the fourth quarter of 2019, down from an upwardly revised 0.5% in the third quarter.
This saw the UK economy expand by 1.1% in 2019, with uneven growth throughout the year due repeated delays of Brexit and heightened political uncertainty in the UK.
The ONS commented:
‘The volatility in 2019 can be seen to some extent in all headline sectors, but most notably in production and construction. However, while construction data can often be volatile, the recent volatility in the production sector has been notable, coinciding with the UK’s two previously planned departure dates from the EU.
‘Despite this, the underlying picture for production was one of weakening throughout 2019, with nine months of the year showing negative rolling three-month growths.’
Also limiting the appeal of the Pound this morning were the accompanying business investment figures, falling by 1% in Q4 as heightened uncertainty in the build up to December’s general election saw firms limit their spending.
Australian Dollar (AUD) Buoyed by Coronavirus Optimism
Meanwhile, the Australian Dollar (AUD) has found some modest support this morning in response to optimism over the coronavirus outbreak in China.
While the death toll has continued to rise, topping over 1000 in China, the infection rate appears to be falling, with the number of reported cases dropping almost 20% on Tuesday.
With the coronavirus possibly peaking already, it’s hoped that the damage caused to global growth will prove to be relatively minor.
Further buoying the ‘Aussie’ was the expectation of more stimulus from China in an effort to offset the disruption caused by the virus in the first quarter of 2020.