Sterling has made some significant gains against the Australian Dollar of late. One of the key catalysts could be the conservatives strong lead in the polls in the build up to the general election. A tory victory could see Boris Johnson in a much stronger position to get a Brexit Deal through. Parliament passing his deal was the recent stumbling block, but with a general election win, no DUP alliance and assurances from his MP’s that they will pass a deal the parliamentary vote may no longer hold up proceedings. As a result Sterling made gains, hitting a near year high against the Aussie of 1.9063.
US-China trade war continues
Poor UK data last week may have hindered the Pounds rise with a fall in Purchase Managers Index data and manufacturing. The Australian economy has its own concerns however, it’s heavy reliance on China is weighing heavily on the Australian Dollar. There is the potential for monetary policy change from the Reserve Bank of Australia (RBA) which could cause further AUD weakness.
The US/China trade war has had many false dawns when it comes to a resolution. With the two super powers going head to head and tit for tat on tariffs both economies are suffering. The knock on effect however is global and Australia is one of the countries it is impacting most.
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