Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Australian Dollar (GBP/AUD) Exchange Rate Falls as Australian Building Permits Sink

May 3, 2019 - Written by John Cameron

GBP/AUD Exchange Rate Sinks as Australian Building Approvals Plummet

The Pound Australian Dollar (GBP/AUD) exchange rate is down today and is currently trading around AU$1.8577 on the inter-bank market.

The Australian Dollar (AUD) rose against the Pound (GBP) today despite the weak Australian building permits figures for March, which fell below the forecast -14.0% to -15.5%.

Kristina Clifton, a Senior Economist at the Commonwealth Bank, commented:

‘The fall in approvals is not surprising given the record amount of residential construction activity that has taken place over the past five years. Approvals also tend to follow trends in house prices. House prices have been falling since late 2017.’

The yearly Australian building approvals also fell against February’s figures by -27.3%.

With China being Australia’s closest trading partner, news that the US-China trade talks are progressing has lent some support to the risk-averse ‘Aussie’ today.

The former US Under Secretary of Commerce, Frank Lavin, said that a deal between the two superpowers was now a ‘strong likelihood’.

The Pound, meanwhile, has fallen as the week closes with no definitive signs of a cross-party agreement between the Labour Party and Conservatives over Brexit, leaving many Sterling traders feeling jittery.

GBP/AUD Exchange Rate Slips as Brexit Woes Weigh on UK Market Sentiment

Today saw the publication of the UK Markit Services PMI figures for April, which rose out of contraction to 50.4 – narrowly avoiding the 50.5 forecast.

Chris Williamson, the Chief Business Economist at IHS Markit, commented:

‘Although business grew more optimistic about the outlook, linked in part to more favourable prospects amid the reduced threat of an imminent ‘no deal’ Brexit, forward looking indicators such as order books and backlogs of work hint at a near-term sustained weakness of demand, which has already filtered through to a reduction of employment.’

Local elections, meanwhile, have indicated a growing disillusion with the two major parties, showing that the electorate are becoming increasingly sceptical over Brexit developments.

Sterling has been weakened on a lack of conclusive statements on Brexit today, despite Theresa May saying that today’s election results indicate that voters want parties to ‘deliver Brexit’.

Meanwhile, the Chair of the newly formed Brexit Party, Richard Tice, commented:

‘The local elections are clearly disastrous for the main legacy parties. The big winners appear to be independents as people switch off and turn away from the Conservatives and Labour.’

GBP/AUD Forecast: Pound Could Rise on Brexit Consensus

UK markets will be closed on Monday for the Early May bank holiday.

‘Aussie’ traders will be looking ahead to Monday’s release of the Chinese Caixin Services PMI for April, which is expected to ease.

These will be followed by the Australian AiG Performance of Construction Index figures for April, and with any improvements this could see the AUD/GBP exchange rate rise further.

The GBP/AUD exchange rate will be driven by Brexit developments next week, following Theresa May’s urgent call for cross-party talks to conclude ahead of the European elections.

Any signs of a cross-party consensus emerging next week could see the Pound soar against the Australian Dollar.

Like this piece? Please share with your friends and colleagues:

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: Pound Australian Dollar Forecasts

Comments are currrently disabled