The AUD to GBP pair rose to a three-week high on mixed economic data from Markit and Commonwealth Bank. The flash manufacturing PMI data for March improved from 49.8 to 50.1. In the report, the researchers found that while manufacturing production dropped to a record low in March, some manufacturers expanded their output because of lack of goods from China. At the same time, a weak Aussie led to higher costs to manufacturers while the rate of inflation rose to a 17-month high.
According to the report, the services sector has been affected significantly. The services PMI dropped to 39.8 in March after contracting by 49.0 in February. This decline is mostly associated with the spreading Coronavirus pandemic. As more people stay home, hotels, entertainment venues, banks, and restaurants have seen less traffic.
Australia has been hit hard by the current crisis because of its close relationship with China. The country exports more than a third of its goods to China and Chinese students make about 38% of all its foreign students. 15% of the country’s tourists come from China.
A positive sign for Australia is that China is making steady progress in beating the disease. Media reports say that life in the country is slowly returning to normal, which will help boost the Australian economy. The AUD/GBP and AUD/USD pair rose by more than 1.20% and 2.0% respectively.
Read our Best Trading Ideas for 2020.
AUD to GBP Technical Analysis
AUD/GBP pair remains in a bullish trend so long as the price remains above the important resistance level of 0.5082. On the four-hour chart below, I have added the Average Directional Movement (ADX) index to show the strength of the current trend.
On the flipside, the pair, which is trading at 0.5105 at 0425 GMT, could move downwards and retest the previous three-week high of 0.5082.