- Pound (GBP) lower as business confidence drops to lowest level in 12 years
- Australian Dollar (AUD) shrugs off worsening US – Sino relations
- Australian & China manufacturing PMI on Monday
- At 09:15 UTC, GBP/AUD is trading -0.3% at 1.8500 >> Real time exchange rate
After a brief show of weakness in the previous session, the Australian Dollar is resuming its climb higher versus the Pound on Friday. The Aussie Dollar settled on Thursday -0.3% at 1.8563, however across the week, the Australian Dollar is set for a 0.7% gain.
May has been another strong month for the currency which is on track for a 4.3% rally versus sterling, adding to a 4.4% surge in the April.
Today at 09:15 UTC, GBP/AUD is trading -0.3% as it tests 1.8500. The pair is trading at the lower end of the daily traded range.
The Pound is on the decline as investors weigh up the reopening of the British economy against lingering Brexit concerns and disappointing data.
Figure from Lloyds Bank revealed that UK business confidence fell to its lowest level since the 2008 financial crisis in May. Most firms said that trading conditions remain difficult, despite capturing the period since the government started easing lockdown measures.
The Pound has been receiving some support from the government reducing lockdown measures. As from Monday, groups of 6 are allowed to meet outside, respecting social distancing rules. Next week car dealerships and street markets can open, with all shops back trading by 15th June.
Whilst reopening the economy is underpinning the Pound, Brexit fears continue to dampen demand for sterling. EU Trade Commissioner Phil Hogan suggested that the British government had given up on a deal, suggesting that a cliff edge Brexit is very much on the cards.
The risk sensitive Australian Dollar is pushing higher despite elevated tensions between US and China. The currency has broadly shrugged off cooling relations between the two powers, even ahead of Trump’s response to China in a speech today. Instead the Aussie Dollar continues to focus on the broader risk on backdrop of global economies reopening after the coronavirus lockdown.
Whilst there is no high impacting Australian economic data today, investors will look ahead to the release manufacturing PMI on Monday from both Australia and China, Australia’s principal trading partner.