The Pound Australian Dollar (GBP AUD) exchange rate continued climbing today as investors reacted positively to comments that the UK government might be willing to pay the EU to retain access to the single market.
Pound Australian Dollar (GBP AUD) Bolstered By Single Market Comments
The GBP AUD has advanced today after Brexit Secretary David Davis said that the British government would consider making payments to the European Union in order to retain access to the single market once the UK leaves the EU.
In responding to a question over whether the government would be willing to offer some sort of contribution in order to ensure access to the single market, the Brexit Secretary said;
‘The major criterion here is that we get the best possible access for goods and services to the European market – and if that is included in what you are talking about, then of course we will consider it.’
Sterling jumped following the remarks as it indicated to investors that a ‘soft Brexit’ may be possible.
Australian Dollar (AUD) Weakens as Iron Ore Plummets
The high-yield Australian Dollar (AUD) continues suffering as iron ore prices freefall.
Iron ore tumbled 6.8% on Wednesday, reaching $72.08 a tonne after hitting a 26-month high of over $80 on Monday as demand fell following China’s announcement that it would be cutting steel production over concerns for the environment.
There are signs that the recent rout may be slowing down however as the Asian Market closed with Chinese commodity futures slightly higher than yesterday, bringing an end to a three day run of losses.
GBP AUD Forecast: Supreme Court Ruling Could Cause Pound Collapse
The Pound to Australian Dollar exchange rate may slide next week if the UK Supreme Court overrules the High Court judgement that the government would not be allowed to trigger Article 50 without first getting the support of Parliament.
Investors fear that if the Supreme Court rules in the government’s favour then it may proceed with a ‘hard Brexit’, prioritising restoring immigration controls over ensuring access to the single market, which traders worry will negatively impact the UK economy.
Current Interbank Exchange Rates
At the time of writing the GBP/AUD exchange rate was trending around 1.68 and the AUD/GBP exchange rate was trending around 0.58.
Comments are closed.