GBP/AUD Sinks Despite Construction Jump, as Election Weighs

02 June 2017 by News Desk   |   SHARE  

Despite a buoyant construction sector, the pound sank against the Australian dollar in Friday’s European session as the upcoming general election weighed on investor sentiment, say industry experts FC Exchange.

UK Construction Data Fails to Inspire Investors

Friday saw the release of Markit’s UK Construction purchasing managers’ index (PMI) which jumped to 56.0 in May from the previous reading of 52.6.

IHS Markit senior economist Tim Moore commented: ‘May’s survey data reveals that the UK construction sector has started to recover strongly from its slow start to 2017. Housebuilding was the key growth driver, with work on residential projects rising at the fastest pace since December 2015. A sustained rebound in residential building provides an encouraging sign that the recent soft patch for property values has not deterred new housing supply. Instead, strong labour market conditions, resilient demand and ultra-low mortgage rates appear to have helped boost work on residential development projects in May.’

UK Politics Weigh on Pound Sterling Exchange Rate (GBP)

It’s likely the pound will remain very volatile and could be subject to further losses if the general election doesn’t yield a Conservative majority. When UK Prime Minister Theresa May originally announced her plans for a snap election sterling rallied. It was thought a landslide victory would take place giving the PM more control in Brexit negotiations. However, as the polls have shifted out of May’s favour, it’s thought the pound could be in for a rocky ride as political uncertainty dampens investor sentiment.

Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate

The pound to Australian dollar (GBP/AUD) exchange rate is trading -0.78% lower at 1.7323.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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