Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Australian Dollar Exchange Rate Fluctuates as Questions Linger over Brexit Deal

November 26, 2018 - Written by John Cameron

GBP/AUD Exchange Rate Struggles despite EU-UK Brexit Deal Approval

The Pound Australian Dollar (GBP/AUD) exchange rate struggled today despite Friday’s slump in the value of iron ore hitting the commodity-sensitive ‘Aussie’, and is currently trading at AU$1.7730.

Sunday’s Brexit approval by the EU Council left Sterling relatively unaffected, with markets holding back as Prime Minister Theresa May begins the process of trying to convince the House of Commons.

GBP remains sensitive to Brexit news with MPs becoming increasingly vocal about their concerns over May’s withdrawal agreement. Ex-Foreign Secretary Boris Johnson described May’s attitude as ‘servile’ to the EU.

Johnson expressed his criticism today:

‘We cannot go on any more with this hopeless can’t-do spirit; this reflexive negativity and defeatism that so woefully underestimates the courage and creativity of the British people.’

Pound Australian Dollar (GBP/AUD) Rangebound as Brexit Uncertainty Overshadows Mortgage Approval Increase

The GBP/AUD exchange rate remained suppressed today, despite data showing that mortgage approvals had increased to 39,697 in October from the five-month low in September, although the figures failed to impress Sterling investors.

With Brexit concerns dominating headlines, the positive mortgage figures were overshadowed by continuing concerns over Theresa May’s ability to convince sceptical MPs.

President of the European Commission, Jean-Claude Juncker, put further pressure on May and the UK’s withdrawal agreement by emphasising that ‘this is the best deal possible for Britain,’ warning ‘and this is the only deal possible. So if the House would say no, we would have no deal.’

The Pound Australian Dollar (GBP/AUD) exchange rate is expected to remain driven by Brexit news, and May’s determined effort to convince Parliament, with the PM commenting:

‘I want that to be a moment of renewal and reconciliation for our whole country. It must mark the point when we put aside the labels of “Leave” and “Remain” for good and we come together again as one people.’

AUD/GBP Buoyed Up by G20 Hopes of Trade Tension Truce

The Australian Dollar Pound (AUD/GBP) exchange rate was buoyed slightly today, with GBP dampened by increasing political concerns.

AUD has also benefited from the imminent G20 meeting, where US President Donald Trump and Chinese President Xi Jinping are due to meet for trade talks, providing a leg up for the ‘Aussie’ as hopes over easing trade tensions strengthen risk-sentiment.

Yesterday saw the governor of the Reserve Bank of Australia (RBA), Philip Lowe, deliver a speech in which he said banknotes would soon be a thing of the past, likely becoming a ‘niche payment instrument,’ and went on to say that abolishing the cheque system would be ‘appropriate’, although ‘we have not reached that point yet.’

G20 and Brexit Remain in Focus for ‘Aussie’ and Sterling (AUD/GBP)

The GBP/AUD exchange rate looks set to be determined by Brexit news as May rallies to convince MPs to accept her proposed withdrawal agreement after getting the EU’s seal of approval.

The ‘Aussie’, meanwhile, will be sensitive to Friday’s G20 meeting where US-China’s trade tensions will be discussed, with investors poised for any news of a trade truce, and with the White House adviser, Larry Kudlow, commenting: ‘It will come to a head at the G20 – I think that’s the key point.’

As the Australian Dollar (AUD) is sensitive to global tensions, we could expect to see an increase in value if there are any signs of progress during the talks.

The Pound, meanwhile, will be increasingly sensitive towards any comments levied at May’s Brexit deal by MPs, with Parliament’s approval being crucial for progressing the deal.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Forecasts

Comments are currrently disabled