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- GBP/AUD Spot Rate: 1.9560, down -0.15% today

- Indicative bank rates for transfers: 1.8885-1.90222

- Indicative broker rates for transfers: 1.9276-1.9394 >> find out more about this rate.

The Australian Dollar fended off a sickly Pound in a risk averse market Friday as expectations of fiscal stimulus mounted down under, while Sterling was again a laggard among major currencies as investors offloaded 'risk assets' ahead of a weekend that could bring more adverse coronavirus headlines.

Australia's Dollar rose against the U.S. Dollar, Canadian Dollar and Pound amid a sell-off in risk assets on Friday but was lower relative to all other major currencies, an unusual performance mix for the Aussie. Gains and losses came amid broad weakness in stock markets and steep losses for oil benchmarks in spite of an Organization of Petroleum Exporting Countries (OPEC) cartel agreement to game prices higher.

Both the U.S. and Canadian Dollars have softened notably since their central banks cut interest rates by 50 basis points earlier this week, eroding much of their earlier yield advantage over once battered and bruised rivals like the Aussie, although Sterling is an outlier among that bunch. The Pound-to-Australian Dollar rate was -0.15% lower at 1.9454 Friday with the British currency down against all major rivals other than the U.S. and Canadian Dollars.

Sterling has consistently ranked among the worst performers in coronavirus-related sell-offs but it's not clear if that results from lingering concerns about the Brexit pathway or if it has more to do with flows moving in and out of the City, where assets under management are more than three times GDP.

Some of the world's largest banks were reported Thursday and Friday to have activated contingency plans in London's financial district of Canary Wharf after a research analyst at one firm was found to have the coronavirus, the first sign of disruption to operations in one of the world's major financial centres. Reports came as the virus appeared to be spreading with increased momentum outside the four major hotspots that are China, South Korea, Italy and Iran.

"Eight patients were identified in the UK where it is not yet clear whether they contracted it directly or indirectly from an individual who had recently returned from abroad. This is being investigated and contact tracing has begun," the British government said Thursday, after announcing the death of "an older patient who had underlying health conditions."

Above: Pound-to-Australian Dollar rate shown at 4-hour intervals alongside AUD/USD rate (black line).

"Government plans to counter the virus are gearing up. PM Morrison signalled that a multi-billion dollar government-assistance package is being formulated. Any government support would be targeted and scalable, with tourism, education and trade exposed industries the most likely to receive support," says Richard Franulovich, head of FX strategy at Westpac. "Treasury estimates the virus may shave “at least” half a percentage point from growth [this] quarter."

Australia's Dollar has outperformed since the Reserve Bank of Australia (RBA) cut its cash rate to a new record low of 0.50% and despite that markets increasingly expect an additional cut from the bank at the next meeting as well as an eventual, unprecedented pivot to quantitative easing later in 2020.

It outperformed the Greenback, Loonie and Sterling Friday even after Australian Bureau of Statistics said retail sales fell by -0.3% in January, when markets were looking for an unchanged reading. And December's contraction was revised down to -0.7%, from -0.5% previously, suggesting a weak handover from to the first quarter for the consumer sector just days after GDP data surprised on the upside with a 0.5% increase for the final quarter.

Some analysts say this outperformance has to do with the fact the Aussie government is one of few that have room on the balance sheet to provide meaningful fiscal stimulus without threatening long-term financial stability.

Above: Pound-to-Australian Dollar rate shown at daily intervals alongside AUD/USD rate (black line).

"There's also lots of room to ease in Sweden, Switzerland, Norway and Australia but the last of these is the one where we see most chance of action. Current account and budget surpluses offer protection for the AUD which has been so badly beaten up in recent years that it may be able to benefit from others' problems now I put out a buy recommendation for it yesterday: Buy AUD/USD," says Kit Juckes, chief FX strategist at Societe Generale.

Juckes reiterated on Friday, a Wednesday recommendation to buy the AUD/USD rate at 0.6620 and target a move up to 0.75 in the coming months.

He said the narrowing gap between interest rates in Australia and the U.S. will alleviate what has been a long-term pressure on the Aussie. The AUD/USD rate has fallen -9.8% since the beginning of 2018 as the Aussie economic outlook darkened at a time when Fed rate hikes were set to widen the rate differential.

He also said persistent downgrades of the Aussie growth outlook have taken expectations down to a level that could now elicit a positive surprise in terms of its performance. And that Australia's budget surplus means the government will be able to deliver the kind of stimulus that economies will really need in order to get past the disruption caused by the spread of viral pneumonia outside of China, which could disrupt some parts of some economies.

"Fear of catching the coronavirus may weigh on retail spending in H1 2020, notwithstanding a potential temporary bounce in sales because some consumers are stockpiling necessities. Our judgement is AUD/USD is due another downward correction. Next week’s Chinese economic data may provide the catalyst," says Joseph Capurso, a strategist at Commonwealth Bank of Australia. "China’s trade balance data is released Saturday. Given the sharp fall in the February PMIs, we expect a very sharp contraction in both imports (‑15%/yr) and exports (‑20%/yr) in January‑February."