GBP/AUD Exchange Rate Falls as Risk Appetite Returns for ‘Aussie’
The Pound Australian Dollar (GBP/AUD) exchange rate fell by 0.3% today, leaving the pairing trading around AU$1.786.
The Australian Dollar (AUD) edged higher against the Pound (GBP) following the encouraging Chinese economic data this morning.
Although Chinese growth figures hit their worst in 27 years, at only 6.2% in the second quarter – below by 0.2% in their first quarter – industrial, retail and fixed asset investment figures buoyed optimism in China’s government’s stimulus program.
China’s annual retail sales for June rose above forecast from 8.6% to 9.8%, while industrial production improved from 5.0% to 6.3%.
Edward Moya, a Market Analyst at OANDA, was cautious however, saying:
‘The trade war is having a huge impact on the Chinese economy. As trade negotiations struggle for meaningful progress, we are probably not near the bottom for China’s economy.’
However, markets remained generally optimistic on China’s economic recovery, providing the ‘Aussie’ with some much needed uplift as risk-appetite returned.
GBP/AUD Exchange Rate Sinks as Housing Prices Figures Fall for First Time in 2019
The Pound, meanwhile, failed to benefit from this morning’s release of the monthly Rightmove house price index figures for July.
These fell from 0.3% to -0.2% – their first fall in 2019.
Miles Shipside, a Director at Rightmove, said:
‘The housing market fundamentals remain largely sound in many parts of the country, but the current political climate means that the crucial ingredient of confidence has been impaired, and that is causing some potential buyers and sellers to hesitate.’
Brexit and the Tory leadership race will remain in focus today, as the two candidates to replace Prime Minister Theresa May – Boris Johnson and Foreign Secretary Jeremy Hunt – are due to go head to head today in the final stages of their campaigns.
Any comments that appear supportive of a no-deal Brexit would prove negative for the Pound.
GBP/AUD Outlook: BoE Governor’s Speech in Focus
‘Aussie’ traders will be looking ahead to tomorrow’s Reserve Bank of Australia’s meeting minutes report.
As Australian markets are becoming increasingly expectant of a rate cut from the RBA, any confirmation of this could see the AUD/GBP exchange rate fall.
Pound investors, meanwhile, will be awaiting tomorrow’ printing of the UK claimant count change figures for July, which are expected to improve.
UK average earnings figures are also expected to increase, potentially boosting market confidence in the Pound.
Focus, however, will remain on the speech from the Bank of England’s Governor Mark Carney tomorrow.
If Mr Carney gives any dovish indications regarding the health of the UK economy, we could see the GBP/AUD exchange rate remain in negative territory.