The Pound Australian Dollar (GBP/AUD) Exchange Rate Muted as Gove ‘Not Wedded’ To Brexit Deadline
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of AU$1.8194.
The Pound remained muted on Thursday as markets wait for the contest to replace Prime Minister Theresa May as leader of the Conservative party.
Brexit uncertainty continues to weigh on Sterling as a Eurosceptic leader would likely increase the risk of a no-deal Brexit.
Meanwhile, one of the leading Tory candidates, Michael Gove said he would rather delay Brexit than rush into a no-deal exit.
Speaking of the ‘arbitrary’ deadline, Gove said he was ‘not wedded’ to the 31 October deadline, but noted the delay would be weeks rather than months.
Annual Aussie Imports and Exports to China at Record Highs
On Thursday, the ‘Aussie’ was left flat as the trade surplus fell from a downwardly revised $4.89 billion in March to $4.87 billion in April.
April marks the 16th consecutive monthly trade surplus which suggests Australia’s external sector is in good shape.
Moreover, annual imports and exports to China are at record highs.
The rolling annual trade surplus with China rose to $48.7 billion in April from $46.7 billion.
However, this could do little to buoy the Australian Dollar against Sterling.
Australian Dollar (AUD) Flat as Aussie Economy Slows to Decade Low
The Australian Dollar remained under pressure as data revealed that the country’s economic growth slowed to a decade low in Q1 2019.
On Wednesday data showed that the economy grew by 0.4% in the first three months of 2019.
However, the annual expansion of 1.8% fell short of the long-term average of 3.5% which dampened sentiment in the ‘Aussie’.
This was also the weakest since the global financial crisis.
Commenting on this, CommSec Chief Economist, Craig James said:
‘The Aussie economy has lost momentum. And softer consumer spending is the main culprit.
‘Both monetary and fiscal stimulus are needed to reduce unemployment and revive inflation. But businesses also need to respond through increased investment.’
Pound Australian Dollar Outlook: Will Disappointing Aussie Home Loans Weigh on AUD?
Looking ahead to the start of Friday’s session in Australia, the Australian Dollar (AUD) could slide against the Pound (GBP) following the release of the AiG Performance of Construction Index.
If May’s index slips for the second consecutive month in a row, sentiment in the ‘Aussie’ could fall.
Meanwhile, the Australian Dollar could slide further following the release of the Aussie home loans.
If home loans contract further than forecast in April it could cause the Pound Australian Dollar (GBP/AUD) exchange rate to slide.