- Concerns over civil liberties in Hong Kong rise as China tables security law
- Developments aggravate fragile US – Sino relations, dragging on risk sentiment
- GBP trades mixed in quiet, public holiday trading
- At 09:00 UTC, GBP/AUD +0.1% at 1.8626 >> Real time exchange rates
The Australian Dollar is trading on the back foot versus the Pound at the start of the new week after three straight weeks of gains. The Australian Dollar rallied +1.3% at 1.8626 versus the Pound across the previous week, on broad Pound weakness.
At 09:00 UTC, GBP/AUD is trading +0.1% 1.8653. This is towards the upper end of the daily traded range of 1.806 – 1.8670 amid rising US – Sino attention and as the UK remains closed in observance of the Spring public holiday.
This week is a quiet week for the Australian economic calendar, leaving sentiment and risk appetite in charge of the risk sensitive Aussie Dollar. The next monetary policy decision is not due from the Reserve Bank of Australia until June 2.
Risk sentiment has slipped lower amid growing concerns over cooling relations between US – Sino and civil liberties in financial hub Hong Kong.
Thousands of protestors took to the streets in Hong Kong as China formally tabled a national security law for Hong Kong and Macau.
The move came after US senior officials warned that Beijing’s plans to impose security laws on ex-British colony Hong Kong could lead to US sanctions, worsening already fragile relations between US and China and hitting demand for the perceived riskier Australian Dollar.
Sterling is trading mixed versus its major peers in a subdued start to the week, as members of Prime Minister Boris Johnson’s Conservative party call for the resignation of a top aid after he violated travel restrictions in the lockdown period.
The UK economic calendar is sparse this week after a full week of releases last week. Jobless claims, inflation and retail sales data all surprised to the downside last week. Service sector and manufacturing sector PMI data was better than what analysts expected but showed the sectors to remain deep in contraction amid the coronavirus crisis. All in all, the data painted a grim picture of the UK economy.
Given the quiet economic calendar investors will remain focused on the easing of lockdown measures and Brexit ahead of a key June deadline for trade talks.