The Pound Australian Dollar (GBP AUD) exchange rate tumbled this morning following the release of the latest polling data for the general election.
According to the most recent YouGov poll, Labour now sits only 5 points behind the Conservatives, with the Tories appearing to have squandered the mammoth lead they enjoyed when the election was first announced.
The Pound initially surged when the Prime Minister, Theresa May first called for the snap election as it was widely perceived that the Tories would win a landslide victory, granting the PM the mandate to pursue her agenda in Brexit and strengthening her position in negotiations with the EU.
However the latest polling data weighed heavily on GBP AUD this morning as markets lost confidence in Theresa May’s ability to gain a greater majority in parliament, an outcome that investors fear will confuse the Brexit process even more.
In a statement YouGov said that the unusual nature of this campaign and the recent attack in Manchester makes it especially difficult to predict what the eventual outcome will be, but suggested that things should become clearer over the coming days as ‘voting intention settles down’.
Meanwhile, Australian Dollar gains against Sterling have been slowed somewhat this morning as sliding oil prices weighed on commodity markets.
The drop in oil follows an OPEC summit on Thursday in which the cartel agreed to the extension of its current production cuts in an effort to shore up crude prices.
However markets were underwhelmed by the extension, after analysts suggested that the cuts would need to be more significant to have any real impact on the global surplus, especially as US producers ramped up production again in recent months.
Elias Haddad, senior currency strategist at the Commonwealth Bank said;
‘The 5% plunge in crude oil prices following the OPEC meeting is weighing on the commodity complex.’
Looking ahead, the GBP AUD exchange rate may continue struggling over the coming weeks if UK polling data sows uncertainty, with any further gains for Labour likely to send markets reeling.
Meanwhile, the Australian Dollar may trend lower next week following the latest Manufacturing and Services Index, with analysts predicting that activity in both sectors likely fell in May.
Current Interbank Exchange Rates
At the time of writing the GBP AUD exchange rate was trending around 1.7319 and the AUD GBP exchange rate was trending around 0.5771.
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