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GBP/AUD Recovers from Worst Levels

Last week’s high: $1.8777

Last week’s low: $1.8356

Australian Dollar Bolstered by Improving Chinese Economy

The Pound Australian Dollar (GBP/AUD) exchange rate struggled last week as Brexit developments lead to a shorter extension to Article 50 than hoped for, while pressure was also increasingly applied on MPs to back Prime Minister Theresa May’s withdrawal agreement or face a no-deal.

The first half of the session saw Theresa May struggle to gain backing for a third ‘meaningful vote’ as changes to the controversial Irish backstop were short in supply. By Tuesday, however, the House of Commons Speaker, John Bercow, ruled out the vote unless ‘substantial’ changes were made to the agreement.

The Australian Dollar, meanwhile, benefited as Asian Dalian iron ore futures surged by nearly 2%. This bolstered the ‘Aussie’ as China is one of Australia’s closest trading partners.

GBP/AUD continued struggling in the second half of the week despite the Brexit deadline being extended as Australian employment data impressed.

However, Sterling recouped losses before the weekend following Theresa May’s announcement that there would be another vote on her Brexit deal.

AUD Outlook: ‘Aussie’ Could Rise on Allayed Fears of RBA Cuts

Looking to the week ahead, Brexit will remain in focus as Theresa May tries to secure backing for her Brexit deal.

Australian Dollar traders, meanwhile, will be looking ahead to Monday’s speech by the Assistant Governor of the Reserve Bank of Australia, Luci Ellis.

Any hints that interest rates are unlikely to be cut would be AUD supportive.

Key Events

25th March

20:30 RBA’s Ellis speech

26th March

09:30 UK BBA Mortgage Approvals (Feb)

27th March

00:10 RBA’s Kent speech

11:00 UK CBI Distributive Trades Survey (Mar)

28th March

07:00 UK Nationwide Housing Prices (Feb)

29th March

00:01 UK GfK Consumer Confidence (Mar)

00:30 Australian Private Sector Credit (Feb)

09:30 UK Gross Domestic Product (QoQ) (Q4)

09:30 UK Gross Domestic Product (YoY) (Q4)

 

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

Arron Morris
Currency Trader
T: 01442 892 065

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