GBP/AUD: Aussie pressured as tariffs remain against China

The British pound is higher against the Australian dollar on Wednesday with the British currency staging a comeback after UK inflation data missed expectations. The Aussie dollar was under pressure, alongside other asset prices tied to China after it emerged the US will maintain its current tariffs until November. US President Trump and Chinese vice premier Liu He are set to sign the agreement at the White House later today.

GBP/AUD was higher by 33 pips (+0.17%) to 1.8897 as of 2pm GMT, close its highs of the week but still in the bottom half of its 5-day price range. Sterling gave up early gains versus the Aussie on Wednesday after the weak UK data but rebounded thereafter in choppy trading. The British currency is attempting to reverse a string of daily losses as markets weigh up the rising chance of a UK rate cut.

The pound

UK price growth slowed across the economy in December according to data released on Wednesday. Weaker inflation is adding to the increasingly loud calls by policymakers at the Bank of England to cut interest rates to sure up the economy. Growth in the Consumer Price Index (CPI) expanded by only 1.3% year-over-year in December, well below forecasts of a 1.5% y/y rise, the same as in November.

Michael Saunders became the third central banker in four days to call for lower interest rate in Britain in a speech on Wednesday. Sanders said it was probably appropriate to cut UK interest rates, although it is not the first time he has said so. Saunders has switched from calling for tighter monetary policy to a looser policy in recent weeks as data from the United Kingdom softened.

The Australian dollar

Reports that tariffs against China will remain for another ten months until November were confirmed by US Treasury Secretary Steve Mnuchin. Any reduction in tariffs will be part of a phase two deal if it is agreed after the US election. It had been hoped that lower tariffs against China would improve growth prospects, not only in China but across the region, especially with large trading partners like Australia. A standstill in the US China trade war does reduce uncertainty but perhaps expectations were a little misguided about the positive boost it could give the global economy. 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.