GBP/AUD Exchange Rate Edges Higher as US-China Talk Trade Ahead of G20
The Pound Australian Dollar (GBP/AUD) exchange rate rose today and is currently trading around AU$1.832 on the interbank market.
The Australian Dollar (AUD) weakened against the Pound (GBP) as shares in Asia – Australia’s biggest trading partner – slipped today as investors look ahead to the meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping set to occur later this week.
Trade negotiations between the two superpowers are already set to go ahead before the G20 meeting, with the two leaders in phone talks.
China’s state news agency, Xinhua, released a statement this morning:
‘According to the instructions from the phone conversation of leaders of both countries, both sides exchanged views on economic and trade issues. Both sides agreed to continue communication.’
Jim Chalmers, the Australian Labour party’s Shadow Treasurer, has argued that the economy’s woes cannot be blamed entirely on global headwinds, saying that domestic matters are being overlooked.
Mr Chalmers said:
‘Australia’s economic mess cannot be attributed primarily on the world. Australia’s most pressing challenges, at least for the time being, are domestic and they’re focused on incomes, consumption and productivity.’
Poor market confidence in the ‘Aussie’ is holding back the AUD/GBP exchange rate today.
GBP/AUD Exchange Rate Rises as Boris Johnson Returns for ‘Media Blitz’
Pound traders are awaiting the publication of the UK CBI Distributive Trades Survey figures for June later on this morning.
Any signs of improvement could prove Pound-positive.
However, with few economic data releases of note until tomorrow, political developments have remained in the spotlight.
Boris Johnson, the former Mayor of London, and favourite for the next Prime Minister of Britain, has undertaken a ‘media blitz’ following his previous refusal to engage in public debates.
His low-profile strategy has been interpreted as to preserve his leadership position during the four-weeks through which the campaign will continue.
Lynton Crosby, a Conservative strategist, commented:
‘There is no perfect formula but as a rule of thumb, if you’re the frontrunner, you minimise the risks.’
Anna Rudd, the Secretary of State for Pensions, however, has put increasing pressure on Mr Johnson to reveal his Brexit plan.
Mrs Rudd said:
‘There’s the impasse with the European Union, and there’s the impasse in parliament with MPs. I appreciate Boris’s enthusiasm and his confidence and positivity, but I still think we’re looking for the evidence of what the plan is.’
GBP/AUD Outlook: Tory Leadership Race to Remain in Focus
Pound investors are awaiting tomorrow’s speech by Mark Carney, the Governor of the Bank of England (BoE), and with any further dovish remarks about the UK economy, we could see the GBP/AUD exchange rate begin to sink.
Tomorrow will also see the BoE’s inflation report hearings, which will provide some indication of the central bank’s tone on the economy.
‘Aussie’ traders, meanwhile, are likely to remain fixated on global political developments.
Any signs that US-China trade talks could provide a compromise between the two superpowers, would buoy market confidence in the risk-averse Australian Dollar.
The Pound Australian Dollar (GBP/AUD) exchange rate will remain sensitive to political developments surround the Tory leadership race.
Any signs that Boris Johnson could change his hard-Brexiter stance on the UK’s relationship with the UK could see Sterling rise on eased no-deal fears.