Australian Dollar rises with US trade deal progress, but BoE looks to halt progress

AUD GBP Seeks Support from Australian Employment Data

The AUD is currently being held captive at the hands of many of the current events around the world. Trade talks with the US and China still rage on, whilst the Bank of England (BoE) discusses its options regarding the rate decision split.

US-China trade deal begins to make some traction

The trade deal talks between the United States and China have been in motion for several weeks now. Progress was beginning to slow as the US president, Donald Trump appeared to be dragging his heels with meeting China’s demands. However, over the past 24 hours, reports have suggested that he is now taking a more open approach and appears to be willing to work to the demands from China.

This news positively affected the Australian dollar as the deal looks more promising with both sides willing to cooperate with each other. This gave a boost to the AUD this Thursday, with hopes that further progress will soon ensue, further strengthening the currency.

Bank of England talks drag down GBP/AUD exchange rate

It looks as though the BoE is hinting at potentially further cutting rates in 2020; this speculation has caused trouble for the GBPAUD interbank exchange rate which fell by 0.6%. Two key members of the BoE voted in favour of a cut in the rate. This caused a split but ended in the interest rate being held at 0.75%. However, the split decision did not win over many, causing the observed loss in investor backing for the GBP.

Aussie trade balance figure saves the day for the AUD strength over the pound

On Thursday, the AUD rose against the pound. This was as a result of September’s Australian trade balance figure being released. The figure reported a raise from 5.926 million to 7.180 million, smashing the forecasts. It was also a good month for Australia’s exports as they ballooned to a new high. Over September, Australia shipped out 43.2 billion worth of services and goods. As a result, the AUD has benefited and new hopes for the Aussie economy have emerged once more.

The AUD is relatively volatile at the minute, but with positive news on the trade deal front paired with positive figures in Australian trade, the AUD appears to be faring well. Buyers and sellers of AUD will keep a close eye on the Bank of England’s stance on interest rates in the coming weeks as rumours of an interest cut suggest it may occur soon.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer [email protected].