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GBP/AUD Investors Anticipate Brexit and RBA News

Last week’s high: AU$1.7907

Last week’s low: AU$1.7371

Brexit Hopes Boost GBP/AUD Near Yearly Highs

Last week saw the Pound to Australian Dollar exchange rate surge as investors digested news that the UK and EU were getting close to reaching an agreement on the price of the Brexit ‘divorce bill’.

Sterling surged following the reports as the divorce bill has been holding up negotiations. However, the Pound was unable to hold its best levels towards the end of the week due to concerns that Britain and Ireland may not reach an agreement on the issue of the Irish border.

The Australian Dollar, on the other hand, saw poor performance for most of the week due to low appetite for risky currencies. However, recent Australian data has been decent and boosted ‘Aussie’ demand on Friday. AiG’s Australian manufacturing PMI for November rose from 51.1 to 57.3.

AUD Outlook: Brexit Developments Could Improve Pound Outlook

Further positive Brexit developments would be Pound-supportive, so that will remain a major cause of GBP/AUD movement in the week ahead.

If doubts emerge that the UK and EU will reach an agreement on the Irish border in time for the EU summit on the 14th of December, the Pound could shed its recent gains.

UK PMI data and trade balance stats could also affect the Pound next week, but Brexit news is likely to be much more influential.

The Australian Dollar, on the other hand, is likely to be influenced by the Reserve Bank of Australia’s (RBA) December policy decision on Tuesday. If the bank’s tone diverts from market expectations, the ‘Aussie’ could react.

Other key Australian data that could influence AUD trade includes Wednesday’s Q3 growth data, and Thursday’s trade balance stats.

Key Events

4th December

12:30 Australian Business Inventories

09:30 UK Construction PMI

5th December

Australian Services PMI

03:30 Reserve Bank of Australia Policy Decision

09:30 UK Services PMI

6th December

12:30 Australian Growth Rate

7th December

Australian Construction PMI

12:30 Australian Balance of Trade

8th December

12:30 Australian Home Loans

09:30 UK Balance of Trade

09:30 UK Manufacturing and Industrial Production

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

James Baxter

Senior Currency Broker
T: 01442 892 062

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