Will the US-China trade war talks take a toll on the Australian dollars value?

Pound to Australian Dollar exchange rate GBPAUD rates as Brexit uncertainty continues

The pound to Australian dollar rate remains close to highest levels seen in almost the past 3-years now, making the exchange of pounds into Aussie dollars an attractive proposition based in recent trading levels.

RBA interest rate cuts on the horizon

Many financial commentators had expected to see the Aussie dollar drop further recently, as the Reserve Bank of Australia was expected to cut rates although it decided to keep them on hold at the last RBA meeting. Interest rate cuts remain on the horizon, and this is in contrast to the Bank of England which is actually expected to hike interest rates before the end of 2021. It’s also worth noting that Australian interest rates sit at record lows of 1.5%, and that rates were cut in neighbouring New Zealand within the past week.

US China trade war looks to affect Australian economy

One major concern for both the Australian and the global economy, is the heating up of the trade war between the US and China which has remained in the financial headlines for a while now. US President Donald Trump has followed through with his warnings and added a number of tariffs on Chinese goods imported into the US over the past 24-hours. This has taken its toll on Chinese economic growth sentiment within the stock markets with the value dropping the week leading up to the decision.

If the tariffs take a negative toll on the Chinese economy it will likely have a negative impact on Australia’s also, and therefore the AUD’s value owing to the fact that China is Australia’s key trading partner.

Domestically, the talks between labour and the conservative parties regarding the Brexit plan moving forward is likely to continue to be one of the main drivers for GBP’s value, so those with a currency requirement involving this pair should continue to monitor this issue.

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