Last week’s high: AU$1.8396
Last week’s low: AU$1.7957
Brexit Impasse Weighs Heavily on GBP/AUD Exchange Rate
Heading into the weekend the GBP/AUD exchange rate slumped sharply in response to a fresh breakdown in Brexit negotiations.
As EU leaders rejected the Chequers proposals Theresa May announced that talks were now at an impasse, prompting the Pound to plunge lower across the board.
Even though trade tensions between the US and China escalated with the imposition of fresh tariffs this failed to keep the Australian Dollar on a weaker footing, meanwhile.
As the tariffs proved more limited than markets had initially feared this encouraged investors to buy back into the higher-yielding AUD.
A modest uptick in the Westpac leading index for August also offered a boost to AUD exchange rates this week.
AUD Outlook: Global Trade Tensions to Drive Australian Dollar
With fresh Australian data a little thin on the ground this week the Australian Dollar is likely to remain primarily driven by wider market developments.
Any signs that the US and China may restart trade discussions could see AUD exchange rates strengthen.
On the other hand, if the Trump administration doubles down on its protectionist rhetoric market risk appetite is likely to diminish once again.
The GBP/AUD exchange rate could struggle to find much support in the coming days as the threat of a no-deal Brexit continues to weigh on the minds of investors.
As anticipation mounts for the Conservative Party conference the mood towards the Pound is unlikely to see any significant improvement.
00:30 Australia ANZ Roy Morgan Weekly Consumer Confidence Index (Sep 23)
11:00 UK CBI Reported Retail Sales (Sep)
19:00 Federal Reserve Policy Decision
02:30 Australia Private Sector Credit (Aug)
09:30 UK Gross Domestic Product (2Q)
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