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GBP/AUD Fluctuates as Brexit Limbo Hampers Pound

Last week’s high: $1.88302

Last week’s low: $1.72951


Australian Dollar Gains against Sterling Plagued by Brexit Uncertainty

The Pound Australian Dollar exchange rate fluctuated wildly last week following the second round of ‘indicative votes’, which were once again entirely rejected by Parliament.

This left the Pound hanging at the beginning of the week, as a state of Brexit limbo heightened with the 12 April deadline date ticking down – potentially, and seemingly more likely, without a deal.

Tuesday saw hopes that an extension of Article 50 would be forthcoming from the EU, but this, many traders realised, would still rely heavily on Theresa May’s Brexit deal passing through Parliament.

By midweek there was a huge turnaround, with Theresa May teaming up with the Labour leader, Jeremy Corbyn, in an attempt to break the political deadlock.

Meanwhile, the UK Markit Services PMI figures slid into contraction, adding to a sense of Brexit-inspired economic gloom, limiting the GBP/AUD exchange rate..

The week closed with a glimmer of hope, however, as EC President Donald Tusk offered a lifeline, saying he would urge the EU 27 to provide a ‘flextension’, a potentially flexible 1-year delay to the Brexit process.


AUD Outlook: Improvement in Chinese Data Could Benefit the ‘Aussie’

Looking to the week ahead, Brexit will remain centre stage as this Friday is the official leaving day from the UK from the EU. Any indications that Theresa May can secure a successful passing of her Brexit deal through Parliament would be beneficial for the Pound.

‘Aussie’ traders will be looking ahead to tomorrow, which will see the publication of Australian home loans figures for February. And any sign of the US and China finally securing a trade deal on positive terms would benefit the risk-averse Australian Dollar.

Many Australian Dollar traders will also be looking to Thursday and Friday, which will see a slew of Chinese economic data. Any signs of improvement in its closest trading partner’s economy could see confidence return to the Australian Dollar.


Key Events

8th April

02:30 ANZ Job Advertisements (Mar)

9th April

02:30 Australian Investment Lending for Homes (Feb)

02:30 Australian Home Loans (Feb)

10th April

15:00 Australian Westpac Consumer Confidence (Apr)

03:30 Australian RBA’s Debelle speech

11th April

01:00 Australian Consumer Inflation Expectations (Apr)

02:30 Chinese Consumer Price Index (YoY) (Mar)

02:30 Chinese Consumer Price Index (MoM) (Mar)

02:30 Producer Price Index (YoY) (Mar)

12th April

01:30 Australian Financial Stability Review

n/a Chinese Exports (YoY) (Mar)

n/a Chinese Trade Balance USD (Mar)


Alastair Archbold

Foreign Exchange Manager

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