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Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Muted as Cross-Party Brexit Talks End

May 17, 2019 - Written by John Cameron

Pound Australian Dollar (GBP/AUD) Exchange Rate Flat a Cross-Party Talks End without an Agreement

The Pound Sterling Australian Dollar (GBP/AUD) exchange rate remained muted, and the pairing is currently trading at an inter-bank rate of AU$1.8577.

Reports emerged on Friday revealing that after six weeks, cross-party Brexit discussions were drawing to a close.

However, the talks are set to end without the Conservatives and Labour coming to an agreement to break the Brexit deadlock.

The parties’ negotiating teams will now discuss options that could be put forward to Parliament instead.

Speaking to the Today programme, Labour chair of the Brexit select committee, Hilary Benn said:

‘It doesn’t come as a great surprise to me because over the six weeks they’ve been going it doesn’t appear much progress has been made […] If there's not going to be any progress then there wouldn’t be much point in carrying on.’

Australian Dollar (AUD) Muted as Beijing Prepared to Suspend Trade Talks

Trade tensions between the US and China continue to escalate, dampening sentiment in the risk-sensitive Australian Dollar.

Further doubt has been cast on US Treasury Secretary Steven Mnuchin’s claim that he would be returning to China for further trade talks.

Chinese state media claimed the US ‘keeps using petty tricks to destroy the atmosphere for talks’ and they should show sincerity or cancel discussions.

It also claimed that Beijing is prepared to suspend trade talks with Washington if it continues its tough action against China.

Australian Dollar (AUD) Left Flat on Fears of RBA Rate Cut

On Thursday, data revealed that Australian unemployment rose to 5.2% in April, leaving unemployment at its highest rate since August 2018.

This likely increased pressure for the Reserve Bank of Australia (RBA) to slash interest rates as unemployment moved further from February’s eight-year low.

Data revealed that the pace of hiring was unable to keep up with the growing Australian labour force, which likely weighed on the Australian Dollar.

Pound Australian Dollar Outlook: Will Signs of an RBA Rate Cut Weigh on AUD?

Looking ahead to next week, the Australian Dollar (AUD) could slide against the Pound (GBP) following the release of the Reserve Bank of Australia’s (RBA) meeting minutes.

If the RBA’s meeting minutes confirm that the bank is looking to slash interest rates in the near future, it could dampen sentiment in the ‘Aussie’.

Meanwhile, further escalation of the US-China trade tensions will likely dampen sentiment in the risk-sensitive Australian Dollar.

If reports reveal that tension between Beijing and Washington has continued to increase, the Pound Australian Dollar (GBP/AUD) exchange rate could rise.

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