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Pound to Australian Dollar Exchange Rate Pushes to New Post-Referendum Best despite Stagnant UK Growth

Pound to Australian Dollar Exchange Rate Gaining More Easily amid Trade Jitters

Market demand for the Pound (GBP) has softened slightly this week, but despite this the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has continued to press ahead to new highs. Weakness in the Australian Dollar (AUD) is keeping the pair high.

While initially mixed, GBP/AUD ultimately saw solid gains last week. GBP/AUD opened the week at the level of 1.9123 and closed near the level of 1.9203.

This week so far, GBP/AUD has pushed even higher, and at the time of writing this morning the pair was trending near a new best level of 1.9319. This was the best GBP/AUD level in over three years, since the 2016 Brexit Referendum.

With the UK General Election now just two days away, the Pound’s potential for further gains may be limited by uncertainties. However, if US-China trade relations keep appearing to worsen, the trade-correlated Australian Dollar’s weakness is likely to persist too.

Pound (GBP) Exchange Rates Steady Near Highs despite Stagnant UK Growth

Last week’s surge in demand for the Pound helped the currency to push into new multi-year-highs against a weak Australian Dollar, but amid uncertainty towards the upcoming UK General Election the Pound’s movement has steadied somewhat.

Investors had been buying the Pound on bets that the ruling Conservative Party will win this week’s election and be able to more easily pass a relatively soft Brexit plan.

However, analysts warn that there is still uncertainty ahead even if the Conservatives win, as the amount of time for negotiation until the end of the previously agreed Brexit transition period is running out as well.

On top of this, the Pound saw a little additional pressure today as a slew of UK ecostats fell short of forecasts.

While the focus remains on election speculation, industrial production and growth both fell short of forecasts in October. This is only making investors more anxious that Brexit can be resolved as a result of the election.

Australian Dollar (AUD) Exchange Rates Pressured despite Surprising RBA Optimism

The Australian Dollar remains one of this week’s weakest major currencies, unable to recover from near its worst levels in years against the Pound.

This is despite fresh comments from Reserve Bank of Australia (RBA) Governor Philip Lowe, expressing confidence in Australian consumers and the economy.

While recent Australian growth data fell short of expectations, RBA Governor Lowe indicated that the growth data was generally in line with the bank’s expectations. On top of this, he expressed confidence that consumer activity would pick up in time.

It was seen as a sign that the RBA was currently resilient, and would not yet become more dovish on monetary policy.

However, overall the Australian Dollar remained unappealing today, as its correlation to trade-sentiment leaves it weakened by US-China trade fears.

Markets are concerned the trade war could escalate again, with fresh tariffs still due to be implemented on the 15th of December and not yet any solid sign that a deal or delay is on the way.

Pound to Australian Dollar (GBP/AUD) Exchange Rate Outlook Focuses on Politics and Trade

This week’s data has only had a limited impact on the Pound to Australian Dollar (GBP/AUD) exchange rate amid the focus on UK politics and US-China trade, and this is likely to continue through the end of the week.

Wednesday’s session will be fairly uneventful save for some Australian consumer confidence stats. If they beat expectations, investors may become more confident in the Reserve Bank of Australia (RBA) stance and this could support the ‘Aussie’.

However, the biggest focus will be Thursday, when Britain’s General Election will be held.

GBP/AUD could be in for fresh gains if the ruling Conservative Party wins the election, but Sterling could tumble if the election leads to a surprise hung Parliament.

Pound movement will be focused on the election, but as the 15th of December tariff deadline approaches, US-China trade developments could also drive the Pound to Australian Dollar (GBP/AUD) exchange rate outlook.