GBP/AUD Exchange Rate Sinks as Chinese Economy Stabilises Despite US-China Trade War
The Pound Australian Dollar (GBP/AUD) exchange rate fell today and is currently trading around AU$1.8375 on the interbank market.
The Australian Dollar (AUD) strengthened against the Pound (GBP) as Australia’s biggest trading partner, China, benefited as the Chinese Yuan stabilised, with markets generally ignoring the US-China trade flare ups.
China, meanwhile, hit back at the US, with the spokesperson for the Ministry of Commerce, Gao Feng, saying:
‘The U.S. … crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain. China is firmly opposed to this. We will closely monitor developments and make adequate preparations.’
The Pound, meanwhile, has struggled as Theresa May is in the process of rewriting her withdrawal bill after extreme pressure from fellow MPs to resign once the European elections have concluded.
Mrs May’s spokesman commented:
‘The prime minister is listening to her colleagues about the bill and will be having further discussions.’
AUD/GBP Exchange Rate Rises as Business Activity Improves
The Australian Dollar has benefited from restored business activity, with the May picking up its fastest pace so far this year.
ISH Market have taken on a bullish tone regarding the Australian economy, saying:
‘Business confidence strengthened for the second month running amid higher new orders and expectations that demand conditions will improve following the federal election.’
GBP/AUD Exchange Rate Sinks as PM’s Leadership Comes Under Threat
The ongoing Brexit uncertainty is continuing to weigh on Sterling, and as the June vote is increasingly called into question as May struggles to gain a cross-party consensus on her withdrawal bill.
Jean-Claude Juncker, the President of the European Commission, is becoming increasingly gloomy about the UK’s prospect of leaving by the end of October, saying:
‘I hope they will agree among themselves, and they will leave by the end of October … I think it’s their patriotic duty to get an agreement. I am getting fed up because we are [just] waiting for the next extension.’
Sir Geoffrey Clifton-Brown, the influential Treasurer of the 1922 Committee, has continued to pursue May’s resignation, saying:
‘I want her to give a timetable for when she will go. I think this blank denial from No 10 today may be a smokescreen because she does not want to influence the outcome of the European elections.’
GBP/AUD Forecast: Brexit and US-China Trade Developments to Remain in Focus
Sterling traders will be looking ahead to tomorrow’s publication of the UK retail sales figures for April, which are expected to ease against February’s 1.1% to -0.3%.
Many Pound traders, however, will be focusing on Brexit developments as Theresa May continues to push forward for a viable withdrawal bill that will likely pass through Parliament in June.
‘Aussie’ investors, meanwhile, will be keeping a close eye on US-China trade developments, and with any signs of them easing, this could benefit the AUD/GBP exchange rate further.