GBP/AUD Starts Week on Bearish Note

GBP/AUD started the week on a bearish note, as the Australian dollar is backed by investors’ optimism over the global economy after China reported better-than-expected factory activity data.

Currently, one British pound buys 1.9072 Australian dollars, down 0.06% as of 5:35 AM UTC. The pair continues to move in up and downs. Nevertheless, judging by larger timeframes, the mood is still bullish for the sterling.

For the moment, the Aussie is driven by China’s manufacturing data that beat analysts’ forecasts. The manufacturing purchasing managers’ index (PMI), prepared by Caixin/Markit, rose to 51.8 last month, from 51.7 in October, showing the fastest growth in three years. Analysts surveyed by Reuters had anticipated a decline to 51.4.

China is the largest trading partner of Australia. Thus, any significant economic update released by China might have a great impact on the Aussie.

In parallel, investors’ hope for a trade deal between the US and China increased even though US President Donald Trump signed two bills that favor Hong Kong protesters.

Hiroyuki Ueno, a senior strategist at Sumitomo Mitsui Trust Asset Management, commented:

“It looks a bit difficult for two countries’ leaders to shake hands and sign a deal this month. What is more likely is to essentially kick the can, with China buying more US farm products while the US postpones its next tariffs.”

He added that markets would consider such an agreement as a de facto deal whether they sign it or not officially.

In the UK, the pound has slightly weakened on fears that the British economy will suffer from political uncertainty. Earlier today, the Confederation of British Industry and Make UK downgraded their growth outlook for 2020. The two industry leaders don’t expect any significant improvement next year even if Prime Minister Boris Johnson wins the election on December 12.

The CBI expects economic growth of 1.3% this year and 1.2% next year, which is slightly lower than the previous forecast released in July.

CBI chief economist Rain Newton-Smith explained:

“Alongside perennial Brexit uncertainty, (businesses) are also contending with softer global demand.” is a news site only and not a currency trading platform. 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.