June 18, 2019 - Written by John Cameron
STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Falls despite Poor Australian House Price Figures
GBP/AUD Exchange Rate Sinks despite Dovish RBA Stance
The Pound Australian Dollar (GBP/AUD) exchange rate is down today and is currently trading around AU$1.824 on the interbank market.
The Australian Dollar (AUD) rose against the Pound (GBP) despite the disappointing Australian House Price Index figures for the first quarter, which fell below the forecast 1.6% to -3.0%.
Bruce Hockman, a Chief Economist at Australian Bureau of Statistics, commented:
‘These results are in line with soft housing market indicators, with sales transactions and auction clearance rates lower than one year ago, and days on market trending higher.’
The Reserve Bank of Australia (RBA) also flagged further easing during the meeting minutes report this morning, although this has failed to drag the ‘Aussie’ below Sterling today.
Gareth Aird, a Senior Economist at CBA, was pessimistic, however, saying:
‘This is about as dovish as it gets. We now expect two further 25 basis-point rate cuts in 2019 and favour the August and November Board meetings.’
Hopes of US-China trade tensions easing, however, have lent the ‘Aussie’ some support, with the billionaire David Rubenstein saying:
‘I go to China a fair bit, and I talk to government officials there, and I obviously talk to government officials here. My view is both sides want a deal.’
GBP/AUD Exchange Rate Falls as Focus Shifts to Tory Leadership Race
The Pound has remained subdued against many of its competitors today, with focus being on the Conservative Party leadership race due to an absence of economic data.
Today will see a second ballot on the MP’s leadership, with Boris Johnson, the former Foreign Secretary, remaining a favourite to win.
Andrea Leadsom – his formal rival in the race – also expressed her backing for Mr Johnson. She said:
‘I think he is the best placed to get us out of the EU at the end of October. His view and mine are closely aligned there.’
However, as Mr Johnson is a known hard-Brexiter, this has caused some concern for UK markets, leaving many Sterling traders feeling jittery.
As leadership campaigns have tended to eclipse cross-party talks over Brexit, this has also weighed on the Pound, as fears of a no-deal exit continually mount.
Today will also see Mark Carney, the chief of the Bank of England deliver a speech.
Any dovish comments about the state of the UK’s economy could see GBP fall further against the ‘Aussie’.
GBP/AUD Forecast: Sterling Could Rise if Political Stalemate is Challenged
Sterling traders will be awaiting tomorrow’s slew of economic data, with the main focus being on the UK Consumer Price Index figures for May.
With the forecast being an easing against the previous month’s, this is likely to prove a drag on GBP.
Tomorrow will also see the publication of the UK Retail Price Index figures for May, which are also expected to ease.
‘Aussie’ traders will be looking ahead to Thursday, however, with the Governor of the Reserve Bank of Australia, Philip Lowe, due to give a speech.
The Pound Australian Dollar exchange rate is more likely to be driven by political developments, however, and with any signs of a breakthrough regarding Brexit could see Sterling rise as the political stalemate is challenged.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts