Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Slips as Conservative Leadership Contest Continues

June 25, 2019 - Written by John Cameron

STORY LINK Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Slips as Conservative Leadership Contest Continues

Pound Australian Dollar (GBP/AUD) Exchange Rate Falls as Johnson ‘Serious’ About Leaving the EU

The Pound Sterling Australian Dollar (GBP/AUD) exchange rate slumped, and the pairing is currently trading at an inter-bank rate of AU$1.8240.

On Tuesday, front-runner Boris Johnson revealed that getting the UK out of the EU was a ‘do or die’ commitment.

In an earlier interview with the BBC, Johnson said he was ‘serious’ about leading the country out of the EU without a deal if the bloc refused to negotiate a new agreement.

Chief Europe Economist at Standard Chartered, Sarah Hewin said that while a no-deal Brexit was not the main scenario for markets, ‘having a front-runner who has clearly stated no-deal is an option, is a concern.’

This likely dampened sentiment in Sterling causing the pairing to slip on Tuesday afternoon.

UK Retail Sales Plunge by Fastest Pace in 10 Years

On Tuesday, data from the Confederation of British Industry (CBI) revealed that retail sales plunged this month.

Sales plummeted in June at the fastest annual pace in 10 years.

The monthly retail sales balance fell to a lower-than-forecast -42 in June from -27 in May.

Commenting on the slump, CBI Economist Alpesh Paleja said:

‘This month’s drop in sales should be taken with a pinch of salt, given the backdrop of last June’s heatwave and the start of the World Cup.

‘But even accounting for both factors, underlying conditions on the High Street remain challenging.’

Australian Dollar (AUD) Rises Ahead of Trump-Xi Meeting

The Australian Dollar (AUD) is likely under pressure ahead of this week’s meeting between US President Donald Trump and Chinese President Xi Jinping.

The two leaders are expected to meet on the second day of the G20 summit in Japan.

Meanwhile, on Monday US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer held a phone conversation with Chinese Vice-Premier Liu He.

During Monday’s call, the opinions on trade from both countries’ heads of state were discussed and there was an agreement to continue communications.

This likely provided the ‘Aussie’ with an upswing of support on Tuesday afternoon.

Pound Australian Dollar Outlook: Will GBP Slide on a Dovish Carney?

Looking ahead to Wednesday the Pound (GBP) could slide against the Australian Dollar (AUD) following a speech from Mark Carney, the Governor of the Bank of England (BoE).

If Carney’s tone is dovish about the outlook for the UK economy, it could dampen sentiment in Sterling.

Meanwhile, it is likely the ‘Aussie’ will remain under pressure ahead of this week’s meeting between US President Donald Trump and Chinese Leader Xi Jinping.

If reports suggest the pair are likely to make progress during the meeting, risk appetite will rise and the Pound Australian Dollar (GBP/AUD) exchange rate will slump.

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