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GBP/AUD Exchange Rate Jumps as Huawei Arrest Spooks Investors

Last week’s high: AU$1.7722

Last week’s low: AU$1.7217

Australian Dollar Slumps as Markets Shun Risk-Sensitive Currencies Following Huawei Drama

The Pound Australian Dollar exchange rate punched higher last week as the arrest of an executive from Chinese telecoms giant, Huawei, threatened to renewed US-China tensions, weakening the appeal of the risk-sensitive ‘Aussie’.

Adding to AUD’s woes was the release of Australia’s latest GDP figures, with a sharp slowdown in third quarter growth stoking speculation of a possible rate cut from the RBA.

Meanwhile, after some initial weakness, the Pound found its feet last week as a vote to give MP’s more say over Brexit was seen as reducing the chances of there being no-deal.

AUD Outlook: Brexit Vote to Drive Dramatic Swings in Sterling this Week?

Looking ahead, the Pound will be front and centre this week, with the parliamentary vote on Theresa May’s Brexit deal likely to prompt significant volatility in currency markets, especially if MPs reject the deal as is widely expected.

Outside of Brexit the publication of the UK’s latest employment figures could also influence GBP exchange rates this week, with investors likely to focus on whether the recent upswing in wage growth was sustained throughout October.

Meanwhile the release of Australia’s own labour report is likely be a key driver of movement in the Australian Dollar this week, with another solid rise in employment likely to help strengthen AUD exchange rates.

 

Key Events

10th December

09:30 UK Industrial Production (Oct)

09:30 UK Trade Balance (Oct)

09:30 UK GDP (Oct)

11th December

00:30 AU NAB Business Confidence (Nov)

00:30 AU House Price Index (Q3)

09:30 UK Unemployment Rate (Oct)

09:30 UK Wage Growth (Oct)

23:30 AU Westpac Consumer Confidence (Dec)

13th December

00:30 AU RBA Bulletin

14th December

00:30 AU Unemployment Rate (Nov)

00:30 AU Employment Change (Nov)

 

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

Alastair Archbold
Currency Trader
T: 01442 892 062

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