The Pound has dropped against the Australian Dollar today due to poor retail sales results, but has the chance to recoup these losses in the future when Parliamentary debate on Brexit once again dominates investor focus.
Retail sales results were worse than forecast in all fields in January, remaining negative on the month and slowing by more than expected on the year.
Further contributing to the Pound Australian Dollar weakness today has been the news that Australia and New Zealand’s Prime Ministers are looking to keep the Trans-Pacific Partnership (TPP) viable, potentially via including other nations that were not present in the original deal.
The Pound may be able to stage a recovery in future, though this is largely dependent on how the House of Lords reacts to the controversial Article 50 bill that has been passed up from the House of Commons.
The bill, which has remained on ice over the past week, is set to take centre stage once again from February 20th. Peers in the House of Lords will be debating the bill and potentially amending it before a final vote is expected to see it approved.
Over the course of this Parliamentary ‘ping pong’, the Government will be watching anxiously to see what kind of changes get made to the bill.
Should amendments get made that maintain ties between certain UK and EU institutions after Brexit, then the Pound could appreciate against the Australian Dollar, owing to signs that the separation process might not be as severe as some had first predicted.
On the Australian front, the Trans-Pacific Partnership (TPP) is expected to remain an influential factor on the Australian Dollar.
With Australian Prime Minister Malcolm Turnbull and his New Zealand counterpart Bill English both agreeing to try and save the trade deal, the odds are rising that the New Zealand Dollar could appreciate heavily on news of a breakthrough.
When Donald Trump first jeopardised the deal by removing the US, it was speculated that China could come in as a replacement. If it looks like the Asian superpower is warming to such an arrangement, then the Australian Dollar could well strengthen against the Pound in the future.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.62 and the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.61.
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