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GBP/AUD Exchange Rate Rises after Signs of EU Concession in Brexit Talks

February 20, 2018 - Written by Tim Boyer

During trading hours on 19th February, the Pound to Australian Dollar exchange rate fell from an opening rate of 1.7731 to a lower closing range in the evening of 1.7688.

There wasn’t a significant amount of UK economic news out on the day, with the Pound being more significantly weakened by reports of a clash in Brexit negotiations.

European Parliament MEP Guy Verhofstadt stated that it was ‘unacceptable’ that EU citizens moving to the UK during the transitional period could receive reduced rights.

This raised concerns that 2018’s Brexit negotiations could become acrimonious as 2017’s did; these fears led to progressive losses in the GBP/AUD exchange rate.

There wasn’t any significant Australian data to speak of on Monday, with the AUD instead being affected by trader speculation about then-unreleased Reserve Bank of Australia (RBA) minutes.

Hints of Easing Tensions in Brexit Talks Trigger GBP/AUD Exchange Rate Advance



The Pound to Australian Dollar exchange rate has risen by 0.3% on 20th February, following the release of a GBP-boosting Brexit report from Business Insider.

It is reported that European Parliament (EP) officials may be planning to grant the UK ‘privileged’ access to the EU single market, which marks a major deviation from the previous stance of the EP.

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While this outlook isn’t set in stone, it suggests that the final Brexit agreement may not be as economically traumatic as some economists had first predicted.

Elaborating on the article, Business Insider Reporter Adam Payne said;

‘One source familiar with the Parliament's activities told Business Insider the European Parliament wants to "steal a march" on the other EU institutions by adopting the resolution prior to the EU27 signing off its negotiating guidelines for talks on the future relationship’.


AUD/GBP Exchange Rate Drops after Lacklustre RBA Minutes Release



The Australian Dollar to Pound exchange rate has seen a moderate decline today, following the release of the Reserve Bank of Australia’s (RBA) minutes for February.

The minutes were largely so-so, not showing any significant change in the bank’s outlook or stance on monetary policy.

The only notable takeaway from the minutes was an oft-repeated warning by RBA policymakers, that;

‘[A stronger Australian Dollar could] result in a slower pick-up in economic activity and inflation than forecast’.


While not a new assertion, this has nonetheless contributed to lower confidence in the Australian Dollar at present.

GBP/AUD Exchange Rate Forecast: Volatility ahead on Wage Growth Stats



Wage growth data will be in the spotlight for Pound and Australian Dollar traders on Wednesday, which could mean that both currencies turn turbulent over the morning.

In the UK’s case, it will be average earnings data for December, both including and excluding bonuses.

Forecasts are for no change in the pace of wage growth in either field, with readings respectively predicted to remain at 2.5% and 2.4%.

Given that the UK inflation rate was reported at 3% in January, forecast-matching wage growth figures will mean that the national wage squeeze will persist for another month.

UK retail sales data showed minimal levels of growth in January, which some blamed on pressures on household finances from the ongoing wage squeeze.

If UK wage growth figures remain static, then the Pound to Australian Dollar exchange rate could decline sharply.

On the other side of the currency pairing, the Australian Dollar will next be affected by the wage price index out early on Wednesday.

This is effectively Australia’s measurement of wage growth, and like the UK is tipped to show no improvement in Q4 2017.

Economists believe that the Reserve Bank of Australia (RBA) is holding off on raising interest rates because of concerns about slow wage growth.

As such, forecast-matching stats could devalue the Australian Dollar and trigger an AUD/GBP exchange rate slump.

Another factor that could weaken the Australian Dollar on Wednesday morning will be a construction output reading for Q4.

This is projected to show a sharp decline in quarter-on-quarter output, from 15.7% to an alarming -10.1%.
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