Signs of US-China Trading Truce Boost AUD/GBP Exchange Rate
The Australian Dollar (AUD) has made a notable 0.8% rise against the Pound (GBP) today, thanks to supportive trading news coming out of the US.
In a development that reduces the risk of Australia being caught in a trade-war crossfire, it is reported that US and Chinese tariff plans are on hold.
Officials from both nations say that they will not impose tariffs on one another, due to an apparent breakthrough in trading negotiations.
It had been forecast that China would have been able to weather a trade war, but this latest ‘ceasefire’ has temporarily removed the risk of Australia also suffering.
It is worth noting that this event doesn’t guarantee a longstanding truce between the US and China, but for now Australian Dollar traders are breathing a sigh of relief.
Growing Concerns over Post-Brexit Trade Trigger -0.7% GBP/AUD Exchange Rate Decline
The Pound (GBP) has clearly struggled against the Australian Dollar (AUD) today, falling by around –0.7% in the pairing.
This sharp decline follows a statement from Foreign Secretary Boris Johnson which has sparked a panic about post-Brexit trade.
Mr Johnson has called for the widespread withdrawal of UK membership to EU agreements, saying:
‘I’m convinced that the Prime Minister will be true to her promises of a Brexit … that sees Britain will come out of the customs union and single market, have borders as frictionless as possible, reject ECJ [European court of justice] interference [and] control immigration.’
While these comments will likely be well-received by Eurosceptic MPs, they have concerned more moderate Brexit supporters and risk a turbulence-causing ‘Hard Brexit’.
Australian Dollar to Pound Exchange Rate Forecast: Are Further AUD/GBP Gains ahead on Construction Stats?
The Australian Dollar (AUD) could rise further against the Pound (GBP) in the near-future, when Australian construction data is released on Wednesday.
First quarter construction activity is forecast to have risen, which could cause further midweek AUD/GBP exchange rate gains.
Higher output levels would be particularly supportive, given the -19.4% decline in activity that was reported for Q4 2017.
This week will be busier for Pound traders, who will be keeping an eye on inflation, retail sales and GDP growth data released from Wednesday to Friday.
The Pound may be unsettled by the inflation rate data, as it is tipped to show higher monthly prices in April but a slowdown for the core year-on-year reading.
If inflation is reported higher in all fields then the Pound could fall in value; such results would risk UK households once again facing a wage squeeze.