Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Australian Dollar (GBP/AUD) Exchange Rate Edges Higher as US-China Trade War Heats Up

August 2, 2019 - Written by John Cameron

GBP/AUD Exchange Rate Rises as Donald Trump Announces Fresh Tariffs on Chinese Goods

The Pound Australian Dollar (GBP/AUD) exchange rate rose today, leaving the pairing fluctuating around AU$1.786.

The Australian Dollar (AUD) fell against the Pound (GBP) following US President Donald Trump’s announcement of fresh 10% tariffs on $300 billion of Chinese goods, further escalating the trade war between the two superpowers.

China’s Foreign Minister Wang Yi said:

‘Adding tariffs is definitely not a constructive way to resolve economic and trade frictions, it's not the correct way.’

As a result, the risk-averse ‘Aussie’ has fallen against many of its competitors today, with China being Australia’s largest trading partner.

Today saw the publication of the month-on-month Australian retail sales figures for June which rose above forecast from 0.1% to 0.4% – their fastest growth in 4-months.

Ben James, a Statistician the Australian Bureau of Statistics, said:

‘There were rises in five of the six industries this month, although overall the retail environment remains subdued.’

The Australian Producer Price Index figures for the second-quarter also saw an uptick, with year-on-year rising from 1.9% to 2.0%, while quarterly figures increased by 0.4%.

GBP/AUD Exchange Rate as UK Construction PMI Remains in Contraction Territory

The Pound (GBP) fell following today’s release of the UK Markit Construction PMI for July, which fell below consensus and remained in contraction territory at 45.3.

Duncan Brock, a Grouped Director at the Chartered Institute of Procurement and Supply, said:

‘The sector felt the pressure of challenging economic conditions and the impact of another disastrous drop in demand growth, as purchasing activity petered out and Brexit nibbled away at confidence and decision-making.’

Brexit fears were allayed somewhat by yesterday’s victory of the Liberal Democrats in the Brecon and Radnorshire by-election, which has now left the Tory Government with a mere majority of 1.

Jo Swinson, the leader of the Democrats, commented:

‘Boris Johnson's shrinking majority makes it clear that he has no mandate to crash us out of the EU.’

GBP/AUD Outlook: UK Markit Services PMI in Focus

Pound traders will be looking ahead to Monday’s publication of the UK Markit Services PMI for July, which is expected to hold steady at 50.2.

Australian Dollar investors will be awaiting for the Chinese Caixin Services PMI for July which is expected to improve from 52 to 52.9.

If these confirm consensus and rise the Australian Dollar could benefit from improving market sentiment in the Chinese economy.

The GBP/AUD exchange rate is likely to sink against the Australian Dollar as no-deal Brexit fears are likely to continue into next week as negotiations between the EU and the UK show no signs of improving.

Like this piece? Please share with your friends and colleagues:

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: Australian Dollar Forecasts Pound Australian Dollar Forecasts

Comments are currrently disabled