Pound Australian Dollar (GBP/AUD) Exchange Rate Steadies as Australian Banks Close for the Queen’s Birthday

June 10, 2019 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Steadies as Australian Banks Close for the Queen’s Birthday

GBP/AUD Exchange Rate Flat as US-China Trade Talks in Focus

The Pound Australian Dollar (GBP/AUD) exchange rate is steady today and is currently trading around AU$1.8211 on the interbank market.

The Australian Dollar (AUD) held steady against the Pound (GBP) as economic news has been in short supply, with Australian markets closed for the day in celebration of the Queen’s Birthday.

Nevertheless, US-China trade tensions have remained in focus for ‘Aussie’ traders, with the currency notably risk-averse, and with the Australian economy heavily reliant on trade with China.

AUD was buoyed, however, by Chinese economic data, with the trade balance figures for May improving on consensus at 279.120bn.

Chinese President Xi Jingping also eased concerns of a breakup between the two superpowers – US and China – saying:

‘It’s hard to imagine a complete break of the United States from China or of China from the United States. We are not interested in this, and our American partners are not interested in this. President Trump is my friend and I am convinced he is also not interested in this.’

The Pound, however, has remained generally subdued against most of its competitors, with Brexit developments being eclipsed by the Tory leadership contest, with Boris Johnson, the former Foreign Secretary, currently being the favourite to win.

GBP/AUD Exchange Rate Rangebound despite Weak UK Growth Figures

Sterling failed to gain on the ‘Aussie’ following the publication of the UK GDP figures for April, which came in worse-than-expected at -0.4%.

Rob Ken-Smith, the Head of the Office for National Statistics (ONS), commented:

‘GDP growth showed some weakening across the latest 3 months, with the economy shrinking in the month of April mainly due to a dramatic fall in car production, with uncertainty ahead of the UK’s original EU departure date leading to planned shutdowns.’

Today also saw the industrial production figures for April, which flipped to -2.7% for the month, while the annual figures also fell below forecast at -1.0%.

These were followed by the manufacturing production figures for April, which eased at -3.9%, leaving many Sterling investors jittery over the health of the UK economy.

Boris Johnson, however, has raised concerns over the possibility of a no-deal Brexit, saying that he would potentially withhold the Brexit ‘divorce’ feet to force the EU into negotiating with the UK – this left many traders sceptical, with fears that the EU may lose its patience.

GBP/AUD Forecast: Sterling Could Rise if Brexit Debates Begin to Move

‘Aussie’ traders will be looking ahead to tomorrow’s publication of Australia’s National Australia Bank’s business confidence figures for May, and with any improvement this could provide some uplift for AUD.

US-China trade developments, however, will remain in focus.

Sterling investors, meanwhile, will be looking ahead to tomorrow’s printing of the average earnings excluding bonus figures for April, which are expected to hold steady.

These will be followed by the UK ILO unemployment rate figures for April, which are forecast to increase.

The Pound Australian Dollar exchange rate will remain fixated on Brexit news, however, and with any indications that there could be a breakthrough, this could benefit the GBP/AUD exchange rate.

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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts Pound Sterling Forecasts