Pound Australian Dollar (GBP/AUD) Exchange Rate Drops as Australian Manufacturing Improves

March 1, 2019 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Drops as Australian Manufacturing Improves

GBP/AUD Exchange Rate Falls as Australian Manufacturing Improves Fastest in 5 Months

The Pound Australian Dollar (GBP/AUD) exchange rate is down today and is currently trading around AU$1.8644 on the inter-bank market.

The Australian Dollar (AUD) gained on the Pound (GBP) today after Australia’s manufacturing improved at its fasted pace in 5 months in February, following last night’s release of the AiG performance of manufacturing index which increased to 54.0 against January’s 52.5.

Many ‘Aussie’ traders, however, are remaining cautious as property price falls and energy costs and draining business confidence.

Innes Willox, a Chief Executive at the Ai Group, commented:

‘The drop off in residential construction activity is flowing along supply chains with both the metal products and the building, wood products and furniture sub sectors contracting.'

‘Looking over the longer term, there are major concerns about the high cost of electricity and gas, particularly in more energy-intensive industries.’

Sterling, however, fell against the ‘Aussie’ today following the release of the UK’s Markit manufacturing PMI figures for February, which drew closer to contraction at 52.0 against January’s 52.6.

Rob Dobson, a Director at IHS Markit, commented:


‘Manufacturing and the broader UK economy … face a difficult 2019, with the slowdown being exacerbated later in the year as inventory positions are unwound and Brexit-related headwinds likely to linger.’

GBP/AUD Exchange Rate Slides as Dominic Raab Criticises EU

The Pound weakened today after Brexit fears rose following comments from the former Brexit secretary, Dominic Raab, who has vowed to vote against Prime Minister Theresa May’s withdrawal agreement, accusing the EU of behaving ‘dishonourably’ over the Northern Irish backstop.

Raab said in an interview with BBC Radio 4’s Today programme:

‘If we sign this deal as is with no change, the problems will get worse and we will go into the next election, potentially, stuck in the backstop begging the EU to let us out of it and not having delivered on our promises to the voters, and I think that would be devastating for public trust in our democracy.’

Sterling traders are becoming increasingly jittery as May’s deal and the EU come under increasing pressure from MPs, which is heightening the possibility of a no-deal between the EU and the UK ahead of the 12 March parliamentary vote.

Australian Dollar Pound (AUD/GBP) Exchange Rate Rises despite US-China Trade Talk Uncertainty

Many Australian Dollar traders, however, are remaining cautious as the US and China are finalising a trade deal, and with no forthcoming indications of any progress, risk-appetite for the ‘Aussie’ remains low.


US President Donald Trump, however, further heightened fears over geopolitical tensions yesterday, saying at a press conference in Hanoi:

‘Speaking of China we’re very well on our way to doing something special. But we’ll see. I am always prepared to walk. I’m never afraid to walk from a deal, and I would do that with China, too, if it didn’t work out.’

GBP/AUD Forecast: Pound Could Fall Further if UK-EU Tensions Mount over Brexit

AUD traders will be looking ahead to Monday next week which will see the publication of the Australian HIA new homes sales figures for January. Any signs of an improvement could provide some further uplift for the AUD/GBP exchange rate.

Sterling investors, meanwhile, will be awaiting Monday’s printing of the UK Markit construction PMI figures for February, which could prove Pound-positive if there is any signs of an increase.

The GBP/AUD exchange rate is likely to remain driven by Brexit developments, however, and with any increasing signs of a division within Parliament over the EU, the Pound could begin to fall further.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Daily Currency Updates Pound Australian Dollar Forecasts