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GBP/AUD Exchange Rate Rocked by Brexit Uncertainty, Stock Market Sell-Off

Last week’s high: AU$1.8726

Last week’s low: AU$1.8426

Australian Dollar Undermined by Sudden Stock Market Drop

The Pound Australian Dollar exchange rate was volatile last week, with rising commodity prices allowing AUD exchange rates to rise at the start of the session despite the UK currency being buoyed by hopes of an imminent Brexit deal against the rest of its peers.

Wednesday brought a marked turnaround in GBP/AUD, with the pairing striking a post-referendum high as investors shunned the risk-sensitive ‘Aussie’ due to a sudden drop in global stock markets.

However the Pound was forced to relinquish these gains almost immediately as Brexit optimism began to sour in the latter half of the week with Theresa May facing pressure from her ministers over potential compromises being made on the Irish border.

AUD Outlook: Will Slowing UK Wage Growth Impact Sterling?

Looking ahead to this week’s session, while Brexit is likely to remain the main driver of movement in GBP, during the run up to the two day EU summit on Wednesday some high impact UK data may also cause Sterling movement.

This could see the Pound struggle through the first half of the week as an expected drop in domestic wage growth and rise in inflation is likely to prompt concerns about consumer spending power in the UK.

Meanwhile the Australian Dollar may look to push higher towards the end of the week if Australia’s labour figures remain robust, as expected.

 

Key Events

16th October

01:30 AU RBA Minutes

09:30 UK Unemployment Rate (Aug)

09:30 UK Wage Growth (Aug)

22:20 AU RBA Debelle Speech

17th October

09:30 UK Inflation Rate (Sep)

12:00 UK EU Summit

18th October

01:30 AU Employment Change (Sep)

01:30 AU Unemployment Rate (Sep)

09:30 UK Retail Sales (Sep)

12:00 UK EU Summit

19th October

09:30 UK Public Sector Borrowing (Sep)

 

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Alastair Archbold
Currency Trader
T: 01442 892 062

 

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