- Sterling drops as IFS weighs in on ‘Brexit’ outcome – Two years of austerity predicted after UK leaves the EU
- Recent YouGov poll undermines supposed ‘Remain’ lead – Balance shown between ‘In’ and ‘Out’ vote
- ‘Aussie’ flat as data shortage combines with poor domestic data – Construction figure falls
- UK GDP stats incoming tomorrow – RBA speeches due from Australia
The Pound has been a generally unstable prospect for investors today, on account of the latest EU Referendum news being less supportive than yesterday’s contributions.
The Australian Dollar has also been trending in a tight range against its rivals, with the weakening effect of a lack of domestic data compounded by signs that the nation’s dairy producers are under pressure.
UK Economic News: IFS Enters ‘Brexit’ Fray, Poll puts Campaigns Neck and Neck
The movement of the Pound today has mainly been influenced by the ongoing debate surrounding the EU Referendum, with the Institute of Fiscal Studies (IFS) breaking its previous neutrality by weighing in on possible outcomes.
The IFS has been plainly critical of a ‘Brexit’ vote, with Director Paul Johnson having stated that in the event of the UK leaving the EU:
‘Getting to [the] budget balance from there, as the government desires, would require an additional year or two of austerity at current rates of spending cuts’.
Predictably, the ‘Leave’ group has dismissed the claims, with Energy Minister Andrea Leadsom claiming that an ‘Out’ vote would actually ‘supercharge’ UK economic performance.
Elsewhere, yesterday’s rally brought on by pro-‘Remain’ polling data has been ended by a more recent YouGov poll that has put both campaign’s chances for victory on a level pegging.
The Pound has been flat against most competitors today, but has risen by 0.3% against the Chinese Yuan (GBP/CNY) and fallen by -0.4% against the Russian Ruble (GBP/RUB).
Australian Dollar makes Limited Movement as National Dairies get a Helping Hand
The value of the ‘Aussie’ in the eyes of investors has taken a hit recently, with the continuing threat of a US interest rate hike in June continuing to hang over the national economy.
On a domestic front, the dire state of conditions for national dairy farmers has been brought to light by the fact that the government has had to create an AUD$555m support package for those involved in the dairy industry, in the wake of continually low dairy prices placing considerably hardships on national farmers and dairy producers.
The ‘Aussie’ has been flat against most of its peers recently, with the only notable exceptions being a slight loss against the Pound Sterling (AUD/GBP) and a similarly-sized gain against the US Dollar (AUD/USD).
Future GBP, AUD Forecast: RBA Speeches and UK GDP Results due Tomorrow
The remainder of the week will bring a range of UK and Australian economic announcements, beginning tomorrow with the announcement of the UK BBA loans for house purchases outcome for April and the Q1 preliminary GDP results.
As of writing, expectations have been for a dip from 45096 to 44700 for the loans outcome and a reprint on previous figures of 0.4% on the quarter and 2.1% on the year for GDP.
Australia’s influence on the GBP/AUD pairing will come mainly in the form of Reserve Bank of Australia (RBA) speeches, although early in the morning the Q1 capital expenditure results are due, which previously came in positively on the quarter.
Speeches to watch out for will all come from RBA Assistant Governor Guy Debelle, who is expected to be speaking in New York at the launch of the ‘Global Code of Conduct for the Foreign Exchange Market’.
Following on from this will be later comments from Debelle in the afternoon, at the Profit and Loss Forex Network Conference and the ACI FMA America panel on the Department of Business, Innovation and Skills (BIS) Code.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.0353 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4915 today.
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