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UK Political Uncertainty triggers Volatility in the GBP/AUD Exchange Rate

Last week’s high: AU$1.8101

Last week’s low: AU$1.7807

Pound Rallies from Lows as No-Deal Fears Fade

The Pound to Australian Dollar exchange rate traded in a wide range last week in response to an increasingly fractious mood in UK politics.

Political uncertainty initially drove GBP exchange rates lower but Sterling rallied mid-week as Boris Johnson suffered three major defeats in Parliament, bolstering expectations the UK could avoid a no-deal Brexit.

AUD investors focused on the Reserve Bank of Australia’s (RBA) policy meeting on Tuesday, with the central bank’s decision to leave rates on hold, along with its generally neutral outlook, strengthening the ‘Aussie’.

While the Australian Dollar struggled to hold ground against a resurgent Pound in the second half of the session, AUD exchange rates flourished in broader trade thanks to easing US-China trade tensions.

AUD Outlook: UK Politics to Remain in the Spotlight this Week?

Looking to the week ahead, political headlines look set to continue driving movement in the Pound.

On the data front, the UK’s jobs report could prove influential, with another solid wage growth print likely to bolster Sterling’s appeal.

AUD investors, meanwhile, will focus on Australia’s labour figures, with the ‘Aussie’ likely to strengthen if employment growth remained robust in August.

 

Key Events

9th September

09:30 UK GDP (Jul)

09:30 UK Trade Balance (Jul)

09:30 UK Industrial Production (Jul)

10th September

02:30 AU Business Confidence (Aug)

09:30 UK Unemployment Rate (Jul)

09:30 UK Wage Growth (Jul)

11th September

01:30 AU Consumer Confidence (Sep)

13th September

02:30 AU Employment Change (Aug)

 

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Alastair Archbold
Currency Trader
T: 01442 892 062

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