GBP/AUD Exchange Rate Rises as Brexit News Recedes Ahead of the New Year
The Pound Australian Dollar (GBP/AUD) exchange rate is up today, and is currently trading within the region of $1.7947 as markets close and Brexit news recedes ahead of the New Year celebrations.
However, Pound (GBP) investors have become increasingly cautious on the news that Prime Minister Theresa May has cut her Cabinet ministers’ Christmas break by five days in preparation for a possible no-deal Brexit.
Stephen Gallo, the European Head of FX Strategy at BMO, commented:
‘We will enter 2019 with the most important aspects of the Brexit situation still unresolved. December was an enormously bad month for Theresa May, [and to] the detriment of the GBP, the remaining Brexit permutations appear to be declining in number.’
The Australian Dollar (AUD), meanwhile, was hit last week by increasing concerns over the global economy, with the absence of China’s release of the Guangdong manufacturing PMIs raising market concern over Australia’s biggest trading partner.
Pound Australian Dollar (GBP/AUD) Exchange Rate Up as Markets Close for Holiday Period
The Pound has benefited from the temporary surcease in Brexit news, with the House of Commons due to return on 7 January to continue discussion over Theresa May’s Brexit deal.
Commenting on the matter, European Commissioner Günther Oettinger said:
‘It is not entirely unlikely that the British parliament will vote for the divorce agreement in January. There is certainly no majority for a disorderly Brexit or for a new referendum.’
Tomorrow will see the release of the UK manufacturing production figures for November, with any signs of an increase likely to bolster market confidence.
Also tomorrow will see the release of the UK mortgage approval figures for November, with any signs of a decrease potentially denting the Pound to Australian Dollar exchange rate.
AUD/GBP Exchange Rate Dips as China Economy Worries Escalate
The Australian Dollar has been unsettled ahead of the New Year with increased uncertainty over China’s economy.
Jason Murphy, an economics writer at news.com.au, commented that ‘China’s newest economic data should send a shiver down our spines’ after their announcement of the ‘lowest retail sales growth in 15 years and weak manufacturing activity.’
Tomorrow will see the publication of Australia’s private sector credit figures for November, with any signs of bullishness benefiting the Australian Dollar to Pound exchange rate.
GBP/AUD Outlook: Brexit and US-China Trade Relations to Remain in Focus
The GBP/AUD exchange rate is likely to be driven by political forces in the New Year, with Brexit debates set to heat up in January as Theresa May rallies to gain support for her divisive Brexit withdrawal deal.
‘Aussie’ investors, meanwhile, will have their sights on US and China trade relations, with any signs of a flare-up between the two nations weakening the AUD/EUR exchange rate.
Wednesday will see the printing of the UK’s Markit manufacturing PMI figures for December which are expected to decrease.
Friday, meanwhile, will see the release of the Markit services PMI data for December, with any signs of an increase potentially boosting the Pound.
New Year’s Day will see the the release of Australia’s AiG performance of manufacturing index figures, with any indications of bearishness likely dampening demand for the ‘Aussie’.
Meanwhile, Thursday will see the publication of Australia’s TD securities inflation figures for December, with ‘Aussie’ traders paying close attention to any signs of an increase, potentially weakening the GBP/AUD exchange rate.
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