GBP/AUD Exchange Rate Eases as ‘Aussie’ Traders Brace for RBA Speech
The Pound Australian Dollar (GBP/AUD) exchange rate fell by -0.2% today, leaving the pairing fluctuating around AU$1.770.
The Pound (GBP) eased against the Australian Dollar (AUD) on news that US-China trade talks could resume following China’s recent return to purchasing US agricultural products.
Xinhua, the state-run Chinese News Agency, commented:
‘The new purchase of American farm products has shown that China is honouring its commitment and also a response to the recent signals of goodwill by the US side.’
As Australia’s economy is so closely tie to China’s, this has provided some uplift for the risk-averse ‘Aussie’.
Australian Dollar investors, meanwhile, will be looking ahead to tonight’s speech by the Christopher Kent, the Reserve Bank of Australia’s Assistant Governor.
Analysts expect the RBA to hold its rate at 1% next month, following two months of back-to-back rate cuts. ‘Aussie’ traders, therefore, will be taking careful note of any comments on the outlook for the Australian economy.
Any dovish comments from Mr Kent would prove AUD-negative.
GBP/AUD Exchange Rate Slips as Brexit Jitters Return Ahead of New PM Announcement
The Pound (GBP) fell against most of its competitors today as no-deal Brexit fears rose ahead of tomorrow’s announcement of the new Tory leader and successor to Prime Minister Theresa May.
As Brexiter Boris Johnson remains a favourite to win over Jeremy Hunt, Sterling traders are becoming increasingly jittery as this heightens the likelihood of a disorderly exit on 31 October.
Philip Hammond, the Chancellor of the Exchequer, has also announced his resignation ahead of Mr Johnson’s likely stepping up as the next Prime Minister.
Mr Hammond said:
‘It’s very important that the prime minister is able to have a chancellor who is closely aligned with him in terms of policy and I therefore intend to resign to Theresa May before she goes to the palace to tender her own resignation on Wednesday.’
Foreign Office minister Alan Duncan has also pre-emptively resigned, saying that Brexit had become a ‘dark cloud’ over UK politics.
GBP/AUD Forecast: Brexit and Tory Leadership Announcement in Spotlight
Sterling traders will be looking ahead to tomorrow’s Financial Policy Committee minutes from the Bank of England (BoE).
Any hints of a possible rate cut in 2019 would prove negative for Pound Sterling (GBP) exchange rates.
Pound investors will also be paying attention to Andrew Haldane, the Chief Economist of the BoE, who is due to deliver a speech tomorrow.
‘Aussie’ traders, meanwhile, will be focusing on geopolitical developments, with any further signs of improvement between US-China relations likely to provide uplift to market sentiment in the Australian Dollar.