GBP/AUD Exchange Rate Muted amidst UK Political Uncertainty, Risk-Off Mood
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning as rising political uncertainty in the UK is offset by deteriorating market risk appetite.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.8938, virtually unchanged from today’s opening levels.
Australian Dollar (AUD) Struggles as US and China Clash over Hong Kong
The Australian Dollar (AUD) is facing pressure this morning amidst renewed tensions between the US and China.
This comes after the US Senate voted unanimously to pass a bill aimed at protecting human rights in Hong Kong amidst widespread protests which have gripped the city in recent months.
Unsurprisingly the passing of the bill drew ire from Beijing, with China’s Foreign ministry spokesman Geng Shuang lambasting the bill for ‘seriously violated international law and basic norms governing international relations’ and stated that ‘China condemns and firmly opposes it’.
Markets fear the move with further sour the chances of the two sides signing off a preliminary ‘phase 1’ trade deal which has under negotiation for weeks.
Casting further uncertainty were also comments from Donald Trump in which he warned of further tariffs if negotiations failed.
Overall the dour mood has capped demand for the risk-sensitive ‘Aussie’.
Pound (GBP) Subdued as First Election Debate Ends in a Tie
The Pound (GBP) is also rangebound this morning as markets reflect on the first head-to-head debate between Boris Johnson and Jeremy Corbyn and its impact on the upcoming general election.
The debate was widely considered a draw with a YouGov poll published after the event suggesting an almost 50/50 split on who performed better.
However given that Corbyn went into the debate significantly behind in the polls, it would suggest the tie probably more benefitted the Labour leader who had nothing to lose.
GBP exchange rates moved correspondingly following the debate, moving lower amidst fears that labour may have closed the gap with the Conservatives.
Markets generally favour a Conservative majority in the upcoming election, on hopes it will help to break the Brexit deadlock in parliament whilst also delivering more business friendly policies than Labour.