GBP/AUD Exchange Rate Rises by 0.9% as May Calls for Cross-Party Brexit Conclusion

GBP/AUD Exchange Rate Increases as Chinese Manufacturing PMIs Ease

UPDATE: The Pound Australian Dollar (GBP/AUD) exchange rate rose by 0.9% today following renewed Brexit optimism following comments from Prime Minister Theresa May, who said she expected a cross-party conclusion to occur by the end of next week.

Meanwhile, the publication of the Chinese manufacturing PMI figures for April, sank below the expected 51.0 increase to 50.2, weighing on market sentiment in the ‘Aussie’.

These were followed by the Chinese non-manufacturing PMI figures for April which also eased, falling against March’s 54.8 to 54.3.

As Australia’s economy is so closely linked to that of China’s, this has weighed on market sentiment in the ‘Aussie’, as the global economy shows signs of stalling despite Beijing’s recent stimulus.

GBP/AUD Exchange Rate Static as US-China Trade Reach ‘Final Laps’

The Pound Australian Dollar (GBP/AUD) exchange rate stabilised today and is currently trading around $1.85362 on the inter-bank market.

The Australian Dollar (AUD) exchange rate failed to gain against the Pound (GBP) despite renewed risk appetite for the ‘Aussie’ following the announcement that the US and China would recommence trade talks this week.

Steve Mnuchin, the US Treasury Secretary, was upbeat, saying:

‘We’re getting into the final laps. I think both sides have a desire to reach an agreement. We’ve made a lot of progress.’

With no notable Australian economic data due out until tomorrow, AUD traders are focusing on geopolitical developments instead.

The Pound, meanwhile, has steadied despite rising fears in the Tory party that local elections – as well as the upcoming European elections – could bode badly for the party over a sense of ‘Brexit betrayal’.

Brendon Lewis, the Chairman for the Conservative Party, warned:

‘[P]arliament has got to come together and agree it is going to vote to leave the EU.’

Today sees no notable UK economic data releases.

GBP/AUD Exchange Rate Rangebound as Tories under Strain from Voters

Today saw the Governor of the Bank of England, Mark Carney, deliver a speech at the Innovate Finance Global Summit, however with comments mostly focusing on fintech, this left the Pound relatively unmoved against the ‘Aussie’.

Cross-party Brexit talks are set to renew this week between the Conservatives and the Labour Party, with any indications that these could provide a breakthrough for the current political impasse likely to prove Pound-positive.

However, focus is remaining on the Conservative Party today, with news mainly focusing on their increasing likelihood of them losing council seats in local elections.

Boris Johnson, the former Foreign Secretary, remained optimistic however, saying:

‘Whatever they may think about what is going on at Westminster – and our current dismal failure to leave the EU – they can see that there is no point in taking out their frustrations on effective and hard-working Tory councillors.’

GBP/AUD Forecast: Pound Could get Boost on Improved Consumer Sentiment Figures

Sterling traders will be looking ahead to tomorrow’s printing of the UK GfK consumer confidence data for April.

The Australian Dollar could rise if Australia’s closest trading partner, China, benefits from tomorrow’s publication of its April manufacturing PMI.

Tomorrow will also see the publication of the Australian AiG Performance of Manufacturing Index figures for April, which are expected to remain static.

The GBP/AUD exchange rate will be directed by political developments this week, with Brexit remaining in focus for the UK as the two major parties attempt to reach a consensus on Theresa May’s withdrawal deal.

David Moore

Contact David Moore