GBP/AUD Exchange Rate Strengthens as Tory Party Maintains it Lead in the Polls
The Pound to Australian Dollar (GBP/AUD) exchange rate is ticking higher at the start of this week’s session as opinion polls show continued support for Boris Johnson’s Conservatives.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8971, climbing 0.3% from its starting levels this morning.
Pound (GBP) Firms as Tory Manifesto Doesn’t Dent Party’s Polling Numbers
The Pound (GBP) is trending higher at the start of this week’s session as markets react to the long-awaited Conservative manifesto.
So far the manifesto has received a lukewarm response from business leaders, with the party’s modest spending plans unable to shake concerns over Brexit.
Josh Hardie, deputy director-general at the Confederation of British Industry (CBI) said:
‘Businesses will be heartened by a pro-enterprise vision, while looking for even more ambition on areas such as access to skills, infrastructure and reaching net zero.
‘But the inconvenient truth remains: sustainable economic growth will be risked if there is a needless rush for a bare bones Brexit deal that would slow down our domestic progress for a generation.’
While it may not have lit the business world on fire, for GBP investors the fact that its release didn’t upset the Conservative’s polling numbers is enough, as memories of the disastrous 2017 manifesto launch remains fresh in the minds of many traders.
Tory manifesto – a document to try to keep out of trouble … https://t.co/x8XRkZPj45
— Laura Kuenssberg (@bbclaurak) November 24, 2019
Australian Dollar (AUD) Remains Supported by Positive Risk Sentiment
Following a sharp move upwards at the end of last week, the Australian Dollar (AUD) remains well positioned against the majority of its peers this morning in light of the risk-on mood in markets.
Risk sentiment has been buoyed by hopes of a trade deal between the US and China being signed off by the end of the year, after President Donald Trump said on Friday a deal was ‘potentially very close’.
This followed comments made by Chinese President Xi Jinping in which he expressed his desire to finalise a ‘phase 1’ trade deal.
Market risk appetite has also strengthened in the wake of Hong Kong’s district council elections, which delivered a stunning victory for pro-democracy candidates and bolsters hopes of a peaceful resolution to the protests which have gripped the city for the last six months.
GBP/AUD Forecast: RBA’s Lowe to Signal December Rate Cut?
Looking ahead, the Pound to Australian Dollar (GBP/AUD) exchange rate may extend its recovery later tonight following a speech by Reserve Bank of Australia (RBA) Governor Philip Lowe.
Lowe is expected to strike a dovish tone as he discusses the topic of ‘unconventional’ monetary policy.
With the minutes from the RBA’s most recent policy meeting revealing the bank had seriously considered easing its monetary policy again in November, a dovish outlook from Lowe is likely to confirm expectations for a December rate cut.
Meanwhile, for GBP investors the focus will remain firmly on UK politics.
While the Conservatives currently dominate the polls, traders will remain wary of potential missteps by party members which could lower Boris Johnson’s odds of securing a majority.