Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as Easing Chinese Manufacturing Figures Drag on ‘Aussie’

May 1, 2019 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as Easing Chinese Manufacturing Figures Drag on ‘Aussie’

GBP/AUD Exchange Rate Edges Higher as Chinese Markets Close for Labour Day

The Pound Australian Dollar (GBP/AUD) exchange rate is up today and is currently trading around AU$1.8576 on the inter-bank market.

The Australian Dollar (AUD) fell against the Pound (GBP) exchange rate despite last night’s improvement in Australia’s AiG Performance of Management Index figures for April, which rose above the expected 51.0 to 54.8.

The Ai Group report said:
‘Respondents … reported improving economic conditions in April. The current range for the Australian dollar is supporting export orders. Infrastructure projects, particularly in New South Wales and Victoria, are supporting demand for machinery and equipment along with metals products.’

However, with Chinese markets closed for the bank holiday, Labour Day, the ‘Aussie’ has remained sensitive to global political developments.

With the Australian economy closely tied to that with China’s – its largest trading partner – yesterday’s easing Chinese manufacturing figures have continued to drag on the ‘Aussie’ today.

The Pound, meanwhile, has risen against the ‘Aussie’ following Prime Minister Theresa May’s announcement that cross-party talks could likely conclude by the end of next week.

GBP/AUD Exchange Rate Rises as ‘Brexit Stockpiling’ Encourages Manufacturing

Today saw the publication of the UK Markit Manufacturing PMI figures for April, which exceeded the expected 53.0 and rose to 53.1.

Rob Dobson, a Director at HIS Markit, commented on these figures, saying:

‘A central theme at UK manufacturers during recent months has been stockpiling activity in advance of Brexit, and this process continued into April. Rates of increase in both inventories of inputs and finished products remained historically rapid, despite cooling from the record highs seen in March.’

The Labour Party, meanwhile, has agreed to include the option of a second referendum in its upcoming manifesto for the European elections, buoying confidence that the option is being acknowledge by at least one of the major parties.

Theresa May said during PMQs at the House of Commons today that the Labour’s customs union policy shares much in common with the Government’s own views, further providing confidence in Sterling as the cross-party deadlock is increasingly challenged.

GBP/AUD Outlook: US-China Trade Talks and Brexit in the Spotlight

Pound traders will be looking ahead to the Bank of England’s (BoE) interest rate decision tomorrow, which is expected to hold steady at 0.75%.

However, Mark Carney, the Governor of the BoE, is due to deliver a speech tomorrow, and with any dovish comments about the UK economy due to the ongoing Brexit uncertainty, then this could see the Pound begin to sink.

Tomorrow will also see the publication of Australia’s HIA new home sales figures for March, and with any improvement, this could provide for some uplift for the ‘Aussie’.

The GBP/AUD exchange rate will likely remain dictated by ongoing political talks, with US-China trade talks remaining in focus for the ‘Aussie’, while cross-party talks will be in the spotlight for Sterling traders.

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TAGS: Pound Australian Dollar Forecasts