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GBP/AUD Trends Near Monthly Highs amid Risk-Aversion

Last week’s high: AU$1.7892

Last week’s low: AU$1.7523

Federal Reserve Jitters Lead to Weakness in Risky Australian Dollar

Uncertainty about how the Brexit process will unfold didn’t prevent the Pound from climbing versus a weaker Australian Dollar last week.

The reality that 2018 would come to an end without any real clarity over Brexit limited the Pound’s strength, but broad-based Australian Dollar weakness led to GBP/AUD gains.

In the middle of the week, the Federal Reserve spooked markets by maintaining a much more hawkish tone on US monetary policy in 2019 than analysts expected.

This attitude reduced demand for higher risk currencies like the ‘Aussie’, and domestic data wasn’t impressive enough to help it recover ground.

AUD Outlook: Political Developments in Focus amid Quiet Data Week

Many major markets will be closed for much of next week to celebrate the festive season, meaning there won’t be much data that could influence the Pound to Australian Dollar exchange rate.

The only relevant data of note will be published on Friday. This includes Australian private sector credit and UK finance mortgage approvals.

With both the Pound and Australian Dollar volatile on political and risk-sentiment uncertainties, GBP/AUD is unlikely to be notably influenced by either of these reports.

Key Events

28th December

00:30 Australian Private Sector Credit

09:30 UK Finance Mortgage Approvals

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

Alastair Archbold
FX Manager
T: 01442 892 060

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