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Pound Australian Dollar Exchange Rate Soars as Tories Maintain Lead in Opinion Polls

Australian Dollar Currency Forecast

GBP/AUD Exchange Rate Rises, UK Outlook Stabilises on Tory Majority Hopes

The Pound Australian Dollar (GBP/AUD) exchange rate soared by 0.9% today, with the pairing currently trading around AU$1.914 as markets reacted positively to news that the Conservatives had maintained their lead over the Labour Party in the major polls.

Sterling investors generally prefer a Tory majority in next week’s general election, with the party promising to resolve Brexit uncertainty by the end of January.

Union Bancaire Privée, a Swiss private bank, stated:

‘Provided the Conservatives win the election, the UK outlook should stabilise. Sterling and domestically-focused equities stand to gain under such a scenario, and a stronger currency, rising consumer spending and increased domestic activity would support industries such as retail, real estate, financials, and airlines.’

In UK economic news, today saw the release of November’s Markit services PMI, which beat forecasts and still remained mired in contraction territory at 49.3.

Tim Moore, Economics Associate Director at IHS Markit, commented:

‘November’s PMI surveys collectively suggest that the UK economy is staggering through the final quarter of 2019, with service sector output falling back into a decline after a brief period of stabilisation.’

AUD/GBP Exchange Rate Sinks as Australian GDP Undershoots Expectations

The Australian Dollar (AUD) fell after Australia’s growth figure undershot expectations leaving ‘Aussie’ traders increasingly concerned as Australia’s economy continues to show concerning signs of slowing down.

Kaixin Owyong, an Analyst at National Australia Bank (NAB), commented:

‘In our view, the fall in private-sector demand suggests that the underlying health of the economy has deteriorated further and is likely to put upward pressure on the unemployment rate.’

US-China trade uncertainty has continued to weigh on the risk-sensitive ‘Aussie today, following US President Donald Trump’s recent comments that a ‘phase one’ trade deal may have to wait until after the 2020 presidential elections.

However, today saw Donald Trump change his tune after he downplayed the idea that negotiations were stalling between the two superpowers.

Lu Xiang, an Analyst at the Chinese Academy of Social Sciences, commented:

‘If the US follows through with the threat of tariffs on December 15, that is definitely a re-escalation, and China will retaliate. [However, Trump is] still weighing the conditions for a deal, but for his political interests, he needs a deal – no matter if it is signed in December, January or February.’

GBP/AUD Outlook: Could the ‘Aussie’ Sink Further on Weak Trade Data?

Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of October’s Australian trade balance figure, which is expected to sink from 7,180 million to 6,100 million.

As a result of tomorrow’s report, we could see the ‘Aussie’ fall further against the Pound as concerns for Australia’s economic health increase.

Tomorrow will also see the publication of Australia’s AiG Performance of Construction Index for November.

UK political developments will continue to move the GBP/AUD exchange rate this week, with any further signs of the Conservatives extending their lead on Labour in the polls likely to boost the Pound.