- UK currency’s appeal remains damaged after ‘Brexit’ – Sterling’s devalued state continues
- Osborne speech serves to calm markets – Chancellor states that emergency budget is not incoming
- Australian Dollar mixed after USD recovers – Incoming election also destabilising ‘Aussie’ prospects
- BoE meeting due tomorrow to discuss ‘Brexit’ implications – Australian home sales due on Wednesday
The Pound has remained on a low note against the Australian Dollar today, on account of the EU Referendum result severely hindering the UK currency’s appeal.
The Australian Dollar has been a more desirable option on the whole, although it too has been harmed by the repercussions of the ‘Brexit’ vote.
UK Economic News: Osborne Comments Provide Temporary Relief for Investors
The Pound has tanked across the board again today, having been put in this condition of extreme weakness by last week’s historic vote for the UK to leave the EU.
Since the opening of trading, the Pound has been steadily declining in value against its peers. Compared to the previous week, however, losses have been far lower than the astonishing drops recorded after the voting result was announced, which were as great as -10% in some cases.
Notable Pound declines have consisted of -2% against the Euro (GBP/EUR), -2.1% against the Australian Dollar (GBP/AUD) and -2.4% against the Swiss Franc (GBP/CHF). At the extreme end of the scale has been a slump of -3.1% against the Russian Ruble (GBP/RUB).
With domestic data absent in the UK until tomorrow, the only real influence had over the Pound has come from Chancellor George Osborne, who was giving his first proper speech post-‘Brexit’ earlier on.
Although the situation remains apparently dire for the UK economy, Osborne put on a brave face, stating that:
‘I want to reassure British people and the world. [The] UK [is] ready to confront what [the] future holds from a position of strength’.
Although this comment reassured investors slightly, the respite was brief and the Pound has since dropped to lower levels against most of its peers.
Australian Dollar Uncertain as US Dollar’s Strength Increases
The ‘Aussie’ has been a comparatively more appealing option than the Pound today, with losses of -0.5% against the Canadian Dollar (AUD/CAD) and the US Dollar (AUD/USD) coming alongside gains of 2.3% against the Pound (AUD/GBP) and 0.7% against the New Zealand Dollar (AUD/NZD).
No Australian data has come out recently, therefore the uncertain footing of the ‘Aussie’ can be at least partly attributed to the fact that the US Dollar has been on a bull run since Friday’s vote.
Another limiting factor for investment in the Australian Dollar has been the upcoming general election vote on Saturday, which is expected to result in a status-quo-enforcing Coalition win, according to the polls. Based on how wrong the Referendum result was forecasted using polling data, however, it is worth taking this outlook with a pinch of salt.
Future GBP, AUD Forecast: BoE Meeting, CBI Stats and Australian Confidence Figures Tomorrow
In the near-term, the next data to influence the GBP AUD exchange rate will come from Australia, in the form of tomorrow morning’s ANZ Roy Morgan weekly consumer confidence result.
Following on from this in the morning proper will be a Bank of England (BoE) meeting to discuss measures to be taken in the aftermath of the Referendum vote, while out a little later on will be the Confederation of British Industry (CBI) reported sales stats for June.
Looking further ahead still, Wednesday’s opening piece of data will consist of Australia’s HIA new home sales for May. These previously fell by -4.7%.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.7834 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5610 today.
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