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GBP/AUD Exchange Rate Fluctuates on Trade Tensions, Brexit Uncertainty

Last week’s high: AU$1.7937

Last week’s low: AU$1.7705

Australian Dollar Driven by Trade War Fears

The Pound Australian Dollar exchange rate was marked by volatility last week, with both trade and Brexit uncertainty prompting major swings in the pairing.

For the Australian Dollar a sharp escalation in trade tensions between the US and China dogged the currency throughout the middle of the week, with observers fearing the countries were nearing the point of no return

However these trade fears began to ease towards the end of the week, allowing for the ‘Aussie’ to rally sharply.

In the meantime, the Pound was rocked by political uncertainty from the get go, with initial losses in the currency being driven by the resignations of Cabinet members Boris Johnson and David Davis.

While markets were calmed as Theresa May avoided a leadership contest, Sterling was only given a brief moment to catch its breath.

The Pound closed the session on the back foot as the publication of May’s Brexit blueprint saw President Trump suggest her plans would ‘kill off’ any chances of a free trade deal with the US.

AUD Outlook: Rise in UK Inflation, Wage Growth to Bolster BoE Rate Expectations?

Looking ahead, it’s set to be a busy session in terms of data this week, potentially driving significant movement in the GBP/AUD exchange rate.

From the UK there will be the release of both inflation and wage growth figures, with the Pound likely to jump should a rise in either stat help to bolster hopes of the Bank of England (BoE) targeting a rate hike next month.

Meanwhile Australia will also publish its latest labour report this week, with the ‘Aussie’ potentially finding support if full time employment is shown to have rebounded in June.

Key Events

17th July

01:30 AU RBA Minutes

09:30 UK Unemployment Rate (May)

09:30 UK Wage Growth (May)

18th July

09:30 UK Inflation (Jun)

19th July

02:30 AU Unemployment Rate (Jun)

02:30 AU Employment Change (Jun)

09:30 UK Retail Sales (Jun)

20th July

09:30 UK Public Sector Borrowing (Jun)

 

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

Alastair Archbold
Currency Trader
T: 01442 892 062

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