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GBP/AUD Exchange Rate Rocked by Heightened Brexit Uncertainty

IfLast week’s high: AU$1.8725

Last week’s low: AU$1.8344

 

Pound Struggles as Brexit Uncertainty Reaches Fever Pitch

The Pound Australian Dollar exchange rate traded in a wide range last week as Brexit drama continued to dominate Sterling sentiment.

The highlights in the ongoing Brexit saga included a jump in Sterling on Wednesday after Theresa May offered to resign as PM if MPs backed her Brexit deal, before immediately falling back as MPs rejected eight possible solutions to Brexit.

Adding to Sterling’s woes was another Brexit vote at the very end of the week, with GBP/AUD striking a one-month low as MPs again rejected May’s withdrawal deal.

Meanwhile driving weakness in the ‘Aussie’ last week was the Reserve Bank of New Zealand’s hint at a possible rate cut this year, with saw AUD fall in tandem with NZD.

However this was offset later in the week by a rise in market risk sentiment, driven by reports of ‘constructive’ US-China trade talks.

 

AUD Outlook: Dovish RBA to Sink the Australian Dollar?

Looking ahead, AUD investors are likely to be focused on the Reserve Bank of Australia’s (RBA) own interest rate decision this week, with the Australian Dollar potentially tumbling if the bank drops any further hints regarding a potential rate cut this year.

Meanwhile, the Pound is likely to remain highly sensitive to Brexit this week

Outside of Brexit we may see Sterling weaken with the release of the UK’s latest PMI figures, if growth in the UK’s private sector remained subdued in March as forecast.

 

Key Events

1st April

09:30 UK Manufacturing PMI (Mar)

2nd April

03:30 AU RBA Rate Decision

09:30 UK Construction PMI (Mar)

10:30 AU Services PMI (Mar)

09:30 UK Wage Growth (Jan)

3rd April

12:30 AU Trade Balance (Feb)

12:30 AU Retail Sales (Feb)

08:30 UK Services PMI (Mar)

 

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To keep up to date with the Australian Dollar, visit the AUD blog in our Currency News section.

 

Alastair Archbold

Foreign Exchange Manager

aja@fcgworld.co.uk

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