Pound Australian Dollar (GBP/AUD) Exchange Rate Increases as Chinese Manufacturing Eases

April 30, 2019 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Increases as Chinese Manufacturing Eases

GBP/AUD Exchange Rate Increases on Weakening Chinese Economy

The Pound Australian Dollar (GBP/AUD) exchange rate is up by 0.8% today and is currently trading around AU$1.8495.

The Australian Dollar (AUD) fell against the stronger Pound (GBP) after the Chinese economy – Australia’s biggest trading partner – suffered from easing manufacturing PMI figures, with the Caixin index for April sinking below forecasts to 50.2.

Chinese non-manufacturing PMI figures for April, meanwhile, also eased to 54.3 against March’s figure of 54.8.

The Japanese financial services company, Nomura, said in its statement:

‘We believe Beijing can’t afford to stop easing yet. We believe the pace of monetary easing will slow, but it still seems too early to withdraw monetary easing measures despite the limited monetary policy scope.’

Today also saw the publication of the Australian private sector credit figures for March, which held steady at 0.3%.

Most ‘Aussie’ traders, however, will be awaiting tonight’s release of the Australian AiG Performance of Manufacturing Index figures for April.

The Pound, meanwhile, has risen on renewed Brexit hopes following comments from Prime Minister Theresa May that she expected cross-party talks to conclude by next week.

GBP/AUD Exchange Rate Rises as Barnier Urges UK for Cross-Party Consensus

Sterling was left unmoved by the printing of the UK GfK consumer confidence figures for April, which remained static at -13.

Joe Staton, a Chief Strategy Director, commented:

‘Despite political carry-on in the Westminster bubble with the clock ticking on Britain’s eventual departure from the EU, consumers are holding firm and remain unshaken by the daily headlines of turmoil and intrigue, although we remain in negative territory.’

The Pound has instead benefited from growing reports that the two major parties, the Conservatives and Labour, are finally gearing up to provide a consensus on Brexit.

This came after Michael Barnier, the European Union’s Chief Brexit Negotiator, called for the UK to wrap up talks on Brexit by the end of this week, alarming the UK Government into action.

Mr Barnier said:

‘The ball is in the UK court. We are hoping to see the results of the cross-party talks this week.’

GBP/AUD Forecast: Sterling Could Rise on Renewed Brexit Optimism

Pound traders are looking ahead to tomorrow’s printing of the UK Markit Manufacturing PMI figures for April, which are expected to ease.

Chinese markets, however, will be closed for Labour Day, which is a national Bank Holiday.

This will leave most ‘Aussie’ traders looking at global political developments instead.

The GBP/AUD exchange rate will be driven by any indications that cross-party talks could arrive at a consensus on Brexit.

Any signs that the two parties could push forward with a deal amenable to Parliament, this could see Sterling rise on renewed optimism in the possibility of a UK-EU deal.

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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts