GBP/AUD has crept higher still.............>

STERLING: GBP/AUD has crept higher still overnight, adding 61 pips. The rate

currently trades at A$1.9532 & struggles to penetrate ascending channel top at

A$1.9556. A clean breakout here would return focus to A$1.9756, the best level

since mid-2016 last printed on Jan 31. Conversely, the rate has to recede under

the channel floor at A$1.9300 before bears can focus on the Feb 6 YtD low of

A$1.9165 & the 50-DMA at A$1.9114.

- Overnight price action was driven by persistent worry re: coronavirus, with

Australia confirming two infections among evacuated passengers of the Diamond

Princess cruiser. Elsewhere, flash Aussie PMI readings from CBA painted a pretty

bleak picture with services & composite gauges slipping into contraction.

- The Covid-19 outbreak has supported the rate since earlier this year, adding

to existing pressure exerted on AUD by the recent bushfire crisis. Yesterday's

labour mkt data proved another source of worry as the unemployment rate ticked

higher amid stronger employment twinned with firmer participation.

- This has outweighed returning Brexit concerns, which have sapped some GBP

strength as both the EU & UK have played hardball as they enter trade talks.