Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as Chinese Data Alarms Markets

January 14, 2019 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as Chinese Data Alarms Markets

GBP/AUD Surges on Further Signs of Chinese Slowdown

The Pound Australian Dollar (GBP/AUD) exchange rate is up by nearly 0.5% today and is currently trading in the region of AUD$1.7838.

The release of today’s Chinese data stats has hit the Australian Dollar (AUD) with China’s exports and imports figures for December taking a worse-than-expected downturn, as exports hit a two-year low.

With the Australian Dollar closely tied to the fortunes of the Chinese economy, any signs of stress in the latter has a marked effect on the currency.

Among the poor data, however, it was revealed that China’s trade surplus with US had reached its highest since 2006, despite US President Donald Trump raising tariffs on imports.

GBP/AUD Exchange Rate Rises as May Says Staying in EU More Likely than No-Deal

The Pound (GBP) is up as UK Prime Minister Theresa May is due to deliver a speech in an effort to gain MPs’ support for her Brexit deal, in which she will ask members to back her.

Pound investors have been buoyed by May’s comment that the UK is more likely to stay in the EU than face a no-deal scenario, giving the Pound support against the Australian Dollar (AUD).

Last week saw the release of the UK GDP figure for November which showed a better-than-expected increase of 0.2% which benefited the Pound.

Pound Australian Dollar (GBP/AUD) Exchange Rate Up as Pound Traders Await Tomorrow’s Vote
Many Pound (GBP) traders remain cautious ahead of tomorrow’s Brexit vote in the House of Commons, with fears of a no-deal Brexit likely preventing Sterling from making any further significant gains.

However, Liam Fox, the Secretary of State for International Trade, told BBC Radio 4:

‘[T]he best way forward is to support the Government’s agreement because it delivers the referendum result and does so in a way that minimises the risks to our economy.’

Today will also see May outline some of the assurances she has received from the European Union over the past few days, potentially buoying the Pound if this increases the likelihood of Parliament voting for her Brexit deal on Tuesday.

GBP/AUD Forecast: Brexit No-Deal Could See GBP/AUD Exchange Rate Plummet

GBP investors will awaiting the Brexit vote tomorrow, with any signs of May’s deal being voted down potentially sending the Pound plummeting against the ‘Aussie’.

AUD investors, however, will be paying attention to tomorrow’s release of China’s year-on-year FDI foreign direct investment with any signs of an increase potentially buoying sentiment in the ‘Aussie’ on signs of an improving Chinese economy.

GBP investors, meanwhile, will be looking ahead to Wednesday’s slew of UK data stats which will see the publication of the Consumer Price Index for December, which is expected to decrease, potentially weakening the GBP/AUD exchange rate.

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TAGS: Pound Australian Dollar Forecasts