Last week’s high: AU$1.7944
Last week’s low: AU$1.7648
Pound Plummets on No-Deal Brexit Fears
The Pound plummeted to a new six-month low against the Australian Dollar last week as persistent Brexit uncertainty prompted a collapse in Sterling sentiment.
GBP investors grew increasingly unnerved by the prospect of a no-deal Brexit last week as both Conservative leadership candidates hardened their stances against the Irish backstop.
Sterling was able to stabilise through the second half of the week however as markets welcomed a surprise surge in UK retail sales in June in hopes that the UK economy may have narrowly avoided a contraction in the second quarter.
Meanwhile, in the spotlight for AUD investors last week was on Australia’s latest jobs report, with a rise in full-time positions in June helping to boost the ‘Aussie’ despite a fall in headline employment.
AUD Outlook: Heightened Political Uncertainty to Drive Volatility in Sterling?
Looking ahead, we expect the Pound to remain highly volatile over the coming week as Boris Johnson is expected to win the Tory leadership contest and become the next UK Prime Minister.
Markets fear that a win for Johnson could increase the chances of a no-deal Brexit, which in turn could lead to a general election later in the summer due to widespread opposition from MPs.
For AUD investors the focus will be on a speech by Philip Lowe, with a cautious outlook from the Governor of the Reserve Bank of Australia (RBA) likely to drag on the Australian Dollar.
11:00 UK CBI Industrial Trends Orders (Jul)
11:00 UK CBI Distributive Trades (Jul)
09:30 UK Finance Mortgage Approvals (Jun)
09:30 UK New Prime Minister Appointed
04:05 AU RBA Lowe Speech
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