With the Election news starting to take the backseat after stealing the limelight for the past couple of weeks, the UK was anticipating the release of the manufacturing PMIs. The figures were not pleasing and showed a new seven-and-a-half-year low, the news plummeted the GBP on Monday. Meanwhile, AUD has been left flat as further details on the ‘phase one’ deal between the US and China has yet to be divulged upon, leaving traders frustrated.
GBP Sees a Decline Following Poor PMI Data
GBP was enjoying its place back up amongst the top performing currencies after the news that Boris Johnson and his Conservative party managed to secure a majority government last Thursday in the General Election. The news was what the market had hoped for and with the announcement the GBP sharply rose in the trading market, bolstering its strength. But on Monday this success was dampened as the manufacturing data for the UK in the final quarter was released. According to the data, the UK was on course to contract in Q4. Experts have spoken about the observed figures and suggested that the biggest shock was the worst output performance since 2012, with purchasing dropping and service companies feeling the effects of price rises in food and fuel.
The Australian Dollar Remains Flat Following a Lack of Details from the US-China Deal
For AUD, the news that the US and China had struck a ‘Phase One’ deal was positive all around. The global economy had been boosted and the China-sensitive AUD rose with the news that the Chinese economy would be set to benefit from the lift in US tariffs. However, traders have become frustrated as further details from the supposed ‘totally done’ deal. The lack of information has caused the AUD to stall. Strategists have noted that with the deal being struck there is a huge sense of relief concerning the trade deal, but there will be a ‘second phase’ to come which may be difficult and cause strain once more.
Looking ahead for the GBP, today will see the release of the UK employment and wage growth data. If this data is poor, then the Sterling will slump against AUD. Meanwhile, traders of AUD will be hoping for further details of the ‘phase one’ deal which could buoy the currency. If a date for the deal to be signed is announced, then AUD could be set to gain strength, edging up against GBP.
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