Last week’s high: $1.8097
Last week’s low: $1.7680
Australian Dollar Rises against Pound Wracked by Brexit Uncertainty
The Pound Australian Dollar exchange rate fluctuated last week, in the face of heightened Brexit volatility and falling inflation data.
The first half of the session was marked by a weakening of the Australian Dollar after poor Chinese data hit the risk-averse ‘Aussie’.
The Pound, however, fluctuated over heightened Brexit uncertainty at the beginning of the session, with Theresa May’s Brexit deal being rejected by Parliament, which was then followed by the Labour leader Jeremy Corbyn tabling of a no-confidence vote against the government.
Sterling sentiment returned slowly in the second half of the week, with the likelihood of a Brexit no-deal diminishing after Theresa May succeeded in her no confidence vote, however these were clipped by poor UK inflation figures on Wednesday.
The pairing closed the week with the Pound slipping against the Australian Dollar following poor retail sales figures for December, dampening confidence in Sterling amidst heightened Brexit uncertainty ahead of May’s Brexit ‘Plan B’ due on Monday.
AUD Outlook: May’s ‘Plan B’ Brexit Moves into Spotlight
Looking to the week ahead, Brexit is once-again to remain in the spotlight with the outcome of today’s judgement of Theresa May’s ‘Plan B’ likely to determine the tone of the rest of the week.
GBP investors will also be looking ahead to the publication of the UK average earnings figures on Tuesday, with any signs of an increase potentially providing some uplift for Sterling.
We could see some notable volatility in GBP exchange rates throughout the week, dependant on whether there is any positive progress in Brexit policy.
Meanwhile, the focus for ‘Aussie’ investors this week will be on the publication of China’s GDP figures, with any signs of stability buoying confidence in the risk-averse Australian Dollar.
Thursday will also see the publication of Australia’s unemployment rate figures, with any signs of an increase potentially lending support for the ‘Aussie’.
However, the GBP/AUD exchange rate is likely to be driven by political factors this week as Theresa May presents a new UK-EU withdrawal deal to an ever more divided Parliament.
N/A Australian HIA New Home Sales (Dec)
02:00 China’s Gross Domestic Product (Q4)
09:30 UK ILO Unemployment Rate (Jan)
09:30 UK Average Earnings excluding Bonus (Jan)
09:30 UK Average Earnings including Bonus (Jan)
09:30 UK Claimant Count Change (Jan)
09:30 UK Public Sector Net Borrowing (Dec)
00:30 Australian Participation Rate (Nov)
09:30 Australian Unemployment Rate (Dec)
10:00 Australian Employment Change (Dec)
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Foreign Exchange Manager