GBP/AUD Exchange Rate Rangebound, Conservative Government to Face Lively Opposition
The Pound Australian Dollar (GBP/AUD) exchange rate held steady at AU£1.833 as Parliament is set to return after the UK Supreme Court’s ‘unlawful’ verdict on Prime Minister Boris Johnson’s extended prorogation period.
As a result, Sterling has held steady against the ‘Aussie’ as the Conservative Government is expected to face lively opposition and calls for Boris Johnson’s resignation, thus placing further pressure on the Tories to ease its hard-Brexit stance.
A Downing Street source commented:
‘In the coming days parliament is likely to be put on the spot to see if it will have an election or whether it will continue to keep the country in zombie-parliament stasis. The only way out is an election and they will be given another opportunity to let the public decide if and when we leave the EU.’
In UK economic news, today saw the release of August’s UK BBA mortgage approvals, which eased from 43.303 thousand to 42.676 thousand.
Richard Pike, Marketing Director at Phoebus Software, said:
‘As parliament gets underway again today it remains to be seen whether activities in Westminster will see people apply the brakes to any housing plans, which could affect the numbers down the line.’
AUD/GBP Exchange Rate Flat as US-China Trade Tensions Return
The risk-sensitive Australian Dollar (AUD) failed to gain on Sterling after US-China trade tensions heightened after US President Donald Trump criticised China’s trade practices at the UN summit yesterday.
Mr Trump lashed out at China:
‘Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale.’
However, following China’s willingness to purchase US goods ahead of next month’s trade talks in Washington, some ‘Aussie’ traders are feeling optimistic over a possible trade deal between the two superpowers.
GBP/AUD Outlook: Sterling Could Rise if No-Deal Brexit is Challenged in Parliament
Pound investors will be looking ahead to tomorrow’s release of September’s UK consumer confidence figure. Any signs of improvement could prove Pound-positive.
Tomorrow will also see a speech by the Bank of England’s Michael Saunders, a member of the Monetary Policy Committee. Should Mr Saunders highlight any near term problems for the UK economy ahead of Brexit, this could clip some of Sterling’s gains.
‘Aussie’ traders, meanwhile, will be focusing on global political developments, with the spotlight remaining on US-China relations. As Australia’s economy relies heavily on China – its closest trading partner – any indications of souring relations between the two nations could weigh on the AUD/GBP exchange rate.
The GBP/AUD exchange rate could, however, rise if the Conservative Government is challenged on its hard-Brexit stance now that Parliament has reopened.