GBP/AUD Exchange Rate Flat as Analysts Become Dovish on Iron Ore Prices
The Pound Australian Dollar (GBP/AUD) exchange rate is steady today and is currently trading around AU$1.8273 on the inter-bank market.
The Australian Dollar (AUD) steadied against the Pound (GBP) as both Australian and Asian markets are in for a quiet session today, with ‘Aussie’ traders remaining increasing concerned over the prospects of a US-China trade deal emerging any time soon.
Iron ore prices have remained in the spotlight for many AUD traders, being one of Australia’s major trading materials, however many analysts are becoming increasingly dovish following the recent peak.
Marius van Straaten and Susan Bates, Commodity Strategists at Morgan Stanley, said in a joint statement:
‘We believe the iron ore price is now starting to approach peak levels. We expect the iron ore price will come down in the second half of this year.’
The Pound, meanwhile, has remained unmoved following Theresa May’s blaming of the Conservative’s failure to deliver Brexit for the disastrous European Election results, in which the Brexit Party were overwhelming voted in favour over the two major parties.
GBP/AUD Exchange Rate Static as Conservative Leadership Raises Concern
Sterling is failing to make any notable gains against the ‘Aussie’, as a combination of leadership uncertainty – Theresa May is due to resign on 7 June – and increasing Brexit uncertainty is continuing to haunt UK markets.
James Cleverly, a Tory MP marked as one of the many involved in the leadership contest, commented:
‘I am Brexit tooth and claw, but we need to be pragmatic and sensible and leave with a deal… The idea that we revert to a pre-referendum reality [if it does not happen] is for the birds.’
However with fears rising that hard-Brexiters like the Former Foreign Minister Boris Johnson is becoming one of the favourites for leadership, this has heightened no-deal Brexit fears, and has continued to weigh on the GPB/AUD exchange rate.
GBP/AUD Outlook: Brexit and Leadership to Remain in Spotlight
Australian Dollar traders will be looking ahead to the Australian HIA new home sales figures for April, and with any signs of improvement this could benefit the ‘Aussie’.
These will be followed by the Australian building permits figures for April, which are expected to improve.
Tomorrow will see a speech from David Ramsden, the Deputy Governor of Markets and Banking for the Bank of England, and any dovish comments about the UK economy could weaken the Pound.
The GBP/AUD exchange rate will remain fixated on political developments over the course of this week, with Brexit and the leadership of the Conservative Party remaining in focus.
Any indications of a return of favour for a second referendum, which is increasingly being aired by members of the Labour Party, could ease fears of a no-deal Brexit and provide some uplift for Sterling.