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GBP/AUD Exchange Rate Slumps as US-China Trade Tensions Ease

Last week’s high: AU$1.7929

Last week’s low: AU$1.7619

 

Australian Dollar Bolstered by Trade Optimism, Fed Rate Speculation

The Pound Australian Dollar exchange rate fell back last week, amid a notable upswing in market risk appetite.

This was driven by a mixture of easing trade tensions on signs that US-China talks were progressing at a healthy pace as well as growing speculation that the Federal Reserve may pause US interest rates this year.

Meanwhile, the Pound weakened last week as the return of Parliament after the Christmas recess renewed Brexit jitters with Theresa May confirming that a vote on her Brexit deal was to take place on Tuesday.

 

AUD Outlook: Brexit Vote to Prompt GBP Volatility?

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

Meanwhile a lull in notable domestic data will leave movement in the Australian Dollar subject to market risk appetite, with the ‘Aussie’ likely to maintain its upward trajectory if trade tensions continue to ease.

 

Key Events

15th January

19:00 House of Commons Brexit Vote

16th January

09:30 UK Inflation Rate (Dec)

23:30 AU Westpac Consumer Confidence (Dec)

17th January

00:30 AU New Home Sales (Dec)

18th January

09:30 Retail Sales (Dec)

 

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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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