GBP/AUD Exchange Rate Gains as Brexit Deal Could be Days Away

The Pound to Australian Dollar (GBP/AUD) exchange rate continued to climb this morning, currently trading around AU$1.807.

The Pound (GBP) saw a growth today as UK-EU trade talks are said to be ‘down to the wire.’

Boris Johnson has lowered demands by asking EU fishing boats to give 60% of the value of their stocks rather than 80%.

Consequently, there are hopes that the UK and the EU will in fact secure a post-Brexit deal before the transition period comes to an end in a matter of weeks.

Ireland’s foreign affairs minister said:

‘The EU needs to hold our nerve and trust its chief negotiator Michel Barnier. I believe if we do that, there is a good chance that we can get a deal across the line in the next few days.’

The expectation that the US and EU will soon follow the UK’s lead in approving a coronavirus vaccine is also helping to bolster market risk appetite.

Australian Dollar (AUD) Steady as Coal Exports Beat Forecasts

The Australian Dollar (AUD) held steady this morning following on from the release of October’s Australian exports data which beat forecasts and rose by 5.4%.

Australia’s iron ore exports mainly to China rose by 14% in October, owing to an increase in price.

However, Australia-China trade relations have become increasingly volatile in recent months, after a 200% hike on tariffs on wine exports, continue to concern ‘Aussie’ investors.

In other news, Australia’s Home Loans data for October fell from 6% to 0.8%, concerning Australia’s housing market as the year comes to an end.

GBP/AUD Outlook: Australian Retail Sales Release could Drag Down AUD/GBP

Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of October’s Australian’s Retail Sales.

With sales unlikely to fall and October’s preliminary reading already showed an expansion of 1.6% the finalised figures are unlikely to see any dramatic shift, proving positive for the Aussie.

Tomorrow will see the release of the UK’s latest UK Construction PMI for November. If the UK’s construction sector shows any signs of recovery since last month it could be positive for the Sterling.

Brexit developments, will of course be looked at by GBP investors and any negative news from UK-EU trade talks could prove negative for the GBP/AUD exchange rate.