Pound v Australian dollar: GBP advances on Australian house price pressure

THE pound to Australian dollar exchange rate has made moderate gains today, with GBP rising to AU$1.739.

Pound sterling and Australian dollarGETTY

Pound made moderate gains with GBP rising to AU$1.739

This advance is a significant improvement on Tuesday’s low, when GBP AUD dropped to AU$1.726.

There hasn’t been any UK economic data out today, with the currency’s current performance largely the result of earlier events.

The remains in the headlines, as does the government’s response to the atrocity.

With election campaigning suspended, traders have instead been focusing on the next actions from Downing Street.

The aim for security chiefs is to ratchet up the security while keeping the country moving

Dominic Casciani - BBC Home Affairs Correspondent

On Tuesday night, the UK terror threat level was raised to ‘critical’, which means that soldiers will be deployed to protect key locations across the UK.

Commenting on the effects of soldiers in the streets, BBC Home Affairs Correspondent Dominic Casciani said: “Some of us will see the Army in key locations that need guarding so that armed police can be freed to focus on policing rather than guarding. 

"We should expect additional time-consuming security checks at ports and so on. The aim for security chiefs is to ratchet up the security while keeping the country moving.”

Theresa MayGETTY

Theresa May could receive a boost in popularity for her strong response to this latest terror incide

In theory, Theresa May could receive a boost in popularity for her strong response to this latest terror incident. This could help the Conservatives recover some of their polling lead in the build up to the general election.

For now opinion polling has been suspended along with political campaigning, so it will be interesting to see what impact this week’s events has had on the figures once polling resumes.

A greater separation in the Conservative and Labour parties would be pound-supportive as a decisive win for the Conservatives is expected to be able to improve the UK’s hand during Brexit negotiations.

Meanwhile, Australian economic news has been poor today, preventing Australian dollar to pound gains.

British militaryGETTY STOCK IMAGE

The UK terror threat level is raised to ‘critical’, which means that soldiers will be deployed

Westpac Bank’s leading index has fallen by -0.1 per cent in April, which implies a reduction in future economic activity.

Additionally, quarterly construction output in the first quarter has dropped -0.7 per cent, down from a prior increase of 0.6 per cent. 

As well as raising concerns about the Australian construction industry, this result also means that national house prices could rise even further as demand continues outstripping supply.

Sydney and Melbourne in particular have been struggling with overheating housing markets, so this latest news will do nothing to ease the situation.

The only remaining Australian economic news this week will be panel participation by Reserve Bank of Australia (RBA) officials in London.

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