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Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as Australian Unemployment Increases

June 13, 2019 - Written by John Cameron

GBP/AUD Exchange Rate Edges Higher as US-China Trade Tensions Weigh on ‘Aussie’

The Pound Australian Dollar (GBP/AUD) exchange rate rose today and is currently trading around AU$1.835 on the interbank market.

The Australian Dollar (AUD) fell against the Pound (GBP) following the publication of the Australian unemployment rate figures for May, which increased above forecast at 5.2%.

Belinda Allen, an Economist at the Commonwealth Bank, was downbeat, saying:

‘More people are looking for work, the reasons why are likely driven by a number of factors; weaker household income growth, housing affordability and low return on investments for older workers.’

Australian employment change figures, however, rose above the forecast 17.5k to 42.3k, preventing the ‘Aussie’ from slipping any further.

Today’s Australian consumer inflation expectation figures for Jun, however, held steady at 3.3%.

US-China trade tensions, however, are also holding the risk-averse Australian Dollar back, with China remaining ominously silent on the G20 meeting between Chinese President Xi Jinping and US President Donald Trump.

Mr Trump failed to aid matters, saying:

‘It’s me right now that’s holding up the deal. And we’re going to either do a great deal with China or we’re not going to do a deal at all.’

GBP/AUD Exchange Rate Rises as Boris Johnson Leads in Tory MP Leadership Votes

The Pound, meanwhile, rose against the Australian Dollar today following votes by the Conservative Party on the new leadership role.

Boris Johnson came out on top, winning by a 114 majority while Jeremy Hunt followed behind at 43 votes.

As a known hard-Brexiter, this has caused some concern for Sterling traders as it heightens the likelihood of a no-deal Brexit in October.

This came following Labour’s failure to pass its motion during yesterday’s parliamentary vote, which would have effectively blocked the future Prime Minister’s ability to pass through a no-deal Brexit in October.

Oliver Letwin, a former cabinet minister, remained pessimistic, saying:

‘No-deal Brexit on 31 October is back to being a racing certainty. It is very hard to see where any further legislative opportunities will come from. So it’s now a question of politics – specifically whether a PM pursuing a no-deal Brexit can command and sustain the confidence of the House of Commons.’

GBP/AUD Outlook: Conservative Leadership Race to Remain in Focus

Sterling traders will be looking ahead to tomorrow’s speech by Mark Carney, the Governor of the Bank of England, and any dovish comments about the UK economy could see the GBP/AUD exchange rate begin to fall.

Australian investors, meanwhile, will be looking towards Chinese data instead, and with China being Australia’s closest trading partner, any signs of improvement in the economy could provide the ‘Aussie’ with some much needed uplift.

The Pound Australian Dollar (GBP/AUD) exchange rate will be driven by political developments this week, and with the Conservative leadership race still ongoing, this is likely to remain in focus.

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