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.
12:30 Australian Business Inventories
09:30 UK Construction PMI
Australian Services PMI
03:30 Reserve Bank of Australia Policy Decision
09:30 UK Services PMI
12:30 Australian Growth Rate
Australian Construction PMI
12:30 Australian Balance of Trade
12:30 Australian Home Loans
09:30 UK Balance of Trade
09:30 UK Manufacturing and Industrial Production
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