GBP/USD: Pound Picks Up From $1.30 On 2 Week Brexit Extension

The Australian dollar US dollar exchange rate gained 0.5% in the previous session, closing at US$0.6897. Today, the pair struck a three and a half month high of US$0.6930 before paring those gains and slipping below US$0.6900, into the red.

Whilst the Australian dollar capitalised on dollar weakness in the Asian session, it has been unable to hold onto those gains. The Aussie dollar was able to shrug off disappointing Chinese manufacturing pmi data, however, concerns over the US — China trade dispute are weighing on demand.

Resurfacing difficulties between the US and China, as they try to reach and sign a trade deal are unnerving investors. China is reportedly unwilling to compromise on structural issues. China is doubting whether a long-term trade deal is possible at all with the US. These reports have poured cold water on hopes that the two sides were just weeks away from signing a deal at the APEC meeting in Chile.

The US — China trade dispute is important to Australia, because China is its largest trading partner. The health of the Chinese economy is very closely tied to the health of the Australian economy and therefore the value of the Aussie dollar.


US NFP Up Next

The dollar was under pressure after the Federal Reserve cut interest rates on Wednesday. The Fed, as expected, cut 0.25% off interest rates to 1.5%. The Fed signalled that it was done cutting rates for this cycle. However, Fed Chair Jerome Powell also said that there would need to be a very strong increase in inflation in order for the Fed to consider hiking interest rates.

Today inflation, as measured by PCE, the Fed’s preferred inflation gauge, stagnated in October compared to September. This was down from a 0.1% increase month on month in September. The weaker inflation hit demand for the dollar in light of Fed Powell’s comments on Wednesday.

US dollar investors will turn their attention to US non-farm payroll roll figures tomorrow. Analysts are expecting just 85,000 jobs were created in October. This would be down from 136,000 jobs created in September. A weak reading could unnerve dollar investors and drag the greenback lower.


What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 USD = 0.6784 AUD

Here, $1 is equivalent to approximately A$0.67. This specifically measures the US dollar’s worth against the Australian dollar. If the Aussie dollar amount increases in this pairing, it’s positive for the US dollar.

Or, if you were looking at it the other way around:

1 AUD = 1.4739 USD

In this example, A$1 is equivalent to approximately $1.47. This measures the Australian dollar’s worth versus the US Dollar. If the US dollar number gets larger, it’s good news for the Aussie dollar. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.