Pound to Australian Dollar Exchange Rate Trending Higher despite Mixed GBP Movement
The Pound to Australian Dollar (GBP/AUD) exchange rate has seen volatile movement this week so far but is generally trending with an upside bias, due to the Australian Dollar’s (AUD) correlation to global trade.
Since GBP/AUD opened this week at the level of 1.8923 the pair has been advancing, and has generally been able to hold above the week’s opening levels.
Following a brief dip lower in the middle of the week GBP/AUD jumped again yesterday. At the time of writing is trending near the level of 1.9020.
This puts it around half a cent below Tuesday’s post-Referendum best levels of 1.9073.
Pound (GBP) Exchange Rates Lack Strength amid UK Election Polling Jitters
For much of the past few weeks, the Pound (GBP) has been resilient on hopes that Britain’s ruling Conservative Party will win a majority in next month’s upcoming 2019 General Election.
A majority would give UK Prime Minister Boris Johnson the ability to pass through his relatively soft Brexit plan, which is currently being seen as one of the most Pound-positive outcomes for the Brexit process.
However this week saw the first televised debate, between Johnson and opposition Labour Party Leader Jeremy Corbyn.
Corbyn’s performance in the debate was stronger than analysts’ low expectations. 49% of viewers polled by YouGov saying Corbyn had won the debate compared with Johnson’s close 51%.
While the stronger Labour performance has not been perceived as having a significant impact on election polls overall, the news is holding the Pound back from holding further gains this week.
Australian Dollar (AUD) Exchange Rates as ‘Phase One’ US-China Deal Could Slip into 2020
The Australian Dollar (AUD) was able to hold its ground earlier in the week, despite a relatively dovish Reserve Bank of Australia (RBA) meeting minutes report.
This has been due to hopes that Australia’s housing market is improving, which is causing fresh speculation that the RBA’s dovishness could be dialled back going forward.
However the Australian Dollar is struggling to find much support from global trade developments. This comes amid concerns that US-China trade relations are worsening again, after coming so close to reaching some kind of preliminary trade arrangement.
There was speculation that the US and China could reach a preliminary ‘phase one’ agreement on trade, as soon as this month. However as tensions between the nations worsens again, there are fears that a preliminary deal could slip as far as next year.
Worsening US-China trade relations have been due to China’s eagerness for more extensive rollback on current tariffs, as well as news that the US Senate had passed a bill backing Hong Kong protestors that US President Donald Trump is expected to sign.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Outlook Remains Focused on Politics and Trade
The Pound to Australian Dollar (GBP/AUD) exchange rate is on track to sustain yet another week of gains this week, amid hopes for a smooth UK election outcome as well as weakness in the Australian Dollar.
As a result though, the pair could still shed some of its gains if Britain’s political outlook becomes more uncertain, or if trade news gives the ‘Aussie’ a fresh boost.
Pound investors will be focused on UK polls. If polls come in showing that the gap between the ruling Conservative Party and opposition Labour Party has thinned, then perceived political uncertainty could worsen and the Pound would face fresh pressure.
On the other hand, Sterling will hold its gains if the Conservative Party continues to be expected to win a majority.
With US-China trade relations only likely to worsen if US President Donald Trump signs a bill backing Hong Kong protestors, analysts are currently feeling more bearish about the trade outlook as well.
Due to the focus on politics and trade, Pound to Australian Dollar (GBP/AUD) exchange rate investors may not be hugely influenced by Britain’s November PMI projections, due tomorrow.