GBP/AUD Exchange Rate Soars as China Caps Overall Australian Coal Imports
The Pound Australian Dollar (GBP/AUD) exchange rate soared above 1.0% today and is trading at AU$1.8402 following reports that one of China’s largest ports, Dalian, has banned imports of Australian coal.
Further news that China would cap all imports of Australian coal to 12 million tonnes a year has left the Australian Dollar struggling.
Coal is Australia’s most valuable export at AU$64bn, and China takes around a quarter of its total shipments.
Vivek Dhar, a commodities analyst at the Commonwealth Bank of Australia, commented:
‘It has crystallised the fear that something [political] is going on, that China is targeting Australian coal.’
The Pound, meanwhile, has continued to gain following clarifications from the UK Government on Jean-Claude Juncker’s downbeat assessment of Brexit today, in which he commented that he wasn’t optimistic that a no-deal Brexit could be avoided.
May’s official spokesman eased concerns of a possible no-deal Brexit saying:
‘It’s still very much the position of the EU that they want the UK to leave with a deal. That means everyone working together with energy in order to secure the assurances that parliament needs.’
Australian Dollar Pound (AUD/GBP) Exchange Rate Struggles as China Tensions Mute Promising Australian Data
The GBP/AUD exchange rate was able to romp higher in spite of Australia’s employment change figures, which showed a stronger-than-expected increase of 39.1K positions in January.
Australian unemployment also remained steady at 5% in January.
Many ‘Aussie’ traders will be awaiting comments from the Reserve Bank of Australia’s Governor Philip Low later onto today – and with recent economic woes these are likely to be dovish in tone.
The US-China trade negotiations, however, are reported to be progressing well, with both nations pushing for a deal by the 1 March ‘trade truce’ deadline, although with tensions occurring closer to home, many ‘Aussie’ investors are remaining jittery.
GBP/AUD Exchange Rate Rises despite No-Deal Brexit Fears
The Pound has stormed higher against the Australian Dollar but it’s gains against other rivals have been limited following comments from Chancellor Philip Hammond, who warned of the no-deal Brexit ‘precipice’.
Hammond did however confirm his commitment to securing a Brexit deal, saying:
‘What I’m telling you is that I and my colleagues are absolutely committed to avoiding that outcome and to making sure that we get the deal.’
This came after two former attorney generals, Dominic Grieve and Justine Greening, the former education secretary, commented that they would leave the Tory party if there were signs of a chaotic Brexit.
GBP/AUD Forecast: Pound Could Rise if No-Deal Brexit Fears Recede
The GBP/AUD exchange rate is likely to remain sensitive to Brexit developments this week, with any signs of a consensus emerging in either Parliament or the EU likely providing some uplift for the Pound as the threat of a no-deal Brexit recedes.
Australian Dollar traders however will be paying close attention to political developments with China. If concerns about the trading relationship between the two nations increase, AUD exchange rates could keep sliding.