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GBP AUD Exchange Rate Today: Where Next for the Pound and the Australian Dollar?

August 25, 2017 - Written by John Cameron

The Pound to Australian Dollar exchange rate concluded the trading week quoted at £1 = AUS$1.62366.

This value was little moved from the week's open at 1.6235.

GBP/AUD continued to fluctuate on Friday 25th August as currency markets prepare for the highly anticipated Jackson Hole symposium and next week’s resumed Brexit talks.

With the data calendar being somewhat sparse for the UK at present Sterling traders have also turned their attention to political manoeuvrings, particularly with the next round of Brexit negotiations scheduled to start in the coming week.

Negotiations have, so far, stalled, as both sides have reached an impasse regarding the schedule by which discussions should take place. London, anxious of the ever looming 2019 ‘Brexit Day’ deadline, is pressing for trade talks to take place at the same time as the ‘divorce’ details.

Members of the EU Commission, however, are not overly enthused with this idea, insisting that they need to see ‘sufficient progress on topics like the movement rights of EU and UK citizens and the infamous Brexit divorce bill, before continuing.

Understandably the result has been stagnation and a loss of demand for the Pound Sterling, with UK businesses (who already express poor confidence when surveyed), becoming increasingly hesitant to invest due to the high levels of uncertainty.

Australian Dollar (AUD) Bolstered by Poor US Dollar Demand



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Tonight a large number of prominent central bankers, finance ministers, economists and academics will be gathering at Jackson Hole in Wyoming for this year’s economic symposium, with current Federal Reserve (FED) Chair Janet Yellen amongst them.

The Australian Dollar, intimately tied to its cousin, the US Dollar, has found strength in the build-up to this event, as traders are anxious about what exactly Yellen will reveal in her speech and how it will affect the US Dollar.

Some prognosticate that Yellen will simply avoid the subject of monetary policy in relation to US Dollar, instead discussing financial stability in less specific terms.

Others, however, worry about being caught unawares, anxious that she might express dovish sentiment.

In addition, there remains the fact that this could be her last speech as Fed Chair, depending on if she gets reappointed in February. US President Donald Trump has already made public his disdain for her as Chair, and Wall Street is already bracing for the possibility that the next leader could come from within their ranks.

Luke Bartholomew, Investment Strategist at Aberdeen Investments stated on the subject:

‘The concern is that a new person would come in and fundamentally shake up the way the Fed does policy… In the short term, at least, I think the market would be concerned about what that change would mean’.
If this does occur, then the GBP AUD exchange rate could come waiver.

GBP AUD Forecast: Big Data and Brexit



Whilst the data calendar will continue to remain somewhat sparse for Sterling next week, Australia is due a number of releases, from new home sales to private sector credit and building approvals.

This pairing will likely be subject to continued volatility, however, due to the aforementioned resumption of Brexit discussions.

If things are seen to be actively progressing then the Pound may find itself bolstered, if, however, the divide only grows between the two parties, then GBP AUD will likely come under pressure.

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