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Pound Australian Dollar (GBP/AUD) Exchange Rate Down Despite Signs of Possible Brexit Delay

January 11, 2019 - Written by John Cameron

Pound Australian Dollar (GBP/AUD) Exchange Rate Slips as UK Manufacturing Shows Decline

The Pound Australian Dollar (GBP/AUD) exchange rate is down today and is currently trading in the region of AUD$1.7704.

The Pound (GBP) struggled against the Australian Dollar (AUD) despite the release of the UK’s GDP figures for November, which showed a better-than-expected increase of 0.2%.

However, this failed to make much of an impact, with investors’ attention focused firmly on Brexit developments.

Today also saw the news that a senior minister had confided to the Evening Standard that there is a likelihood the Brexit date of 29 March could be delayed, commenting:

‘The legislative timetable is now very very tight indeed. Certainly, if there was [a] defeat on Tuesday and it took some time before it got resolved, it’s hard to see how we can get all the legislation through by March 29.’

Although this buoyed the Pound temporarily, it still failed to make any significant gains against the Australian Dollar.

Today also saw the release of the UK’s manufacturing production figures for November which decreased by -0.3%.

These were followed by the publication of the UK’s industrial production figures and the goods trade balance figures for November which both decreased.

Peter Dowd, the shadow Chief Secretary to the Treasury, commented on today’s releases:

‘Slowing growth and more disappointing manufacturing figures are another sign of the failures of the Tories on Brexit negotiations and economic policy in general.’

AUD/GBP Exchange Rate Rises as Australia Retail Sales Increase in November

The Australian Dollar, meanwhile, was strengthened by today’s release of the seasonally-adjusted retail sales figures for November which showed a better-than-expected increase by 0.4%.

These were reportedly improved by Black Friday and Cyber Monday sales held later in the month, with Ben Faulkner, Acting Director of Quarterly Economy Wide Surveys at ABS, commenting:

‘Household goods retailing, at 1.2%, led the rises. . . There was also a notable rise for clothing, footwear and personal accessories retailing of 1.5%. Both of these industries were impacted by strong promotional activity in the November month, including Black Friday sales.’

However, the Australian Dollar has managed to gain on the Pound despite yesterday’s release of some Chinese data showing a slowing of its economy; with China being Australia’s biggest trading partner this has caused some alarm for AUD investors.

GBP/AUD Outlook: Tuesday’s UK Brexit Vote in Focus

Monday will see no UK data releases, with GBP investors instead looking ahead to Tuesday when Parliament is set to vote on Theresa May’s Brexit deal.

Any signs of a ‘no-deal’ vote being likely on Tuesday would see the Pound plummet against the ‘Aussie’.

‘Aussie’ traders, meanwhile will be looking ahead to Monday’s release of Australia’s consumer inflation expectation figures for January.

These will be followed by a number of Chinese data releases, with any signs of a slowing Chinese economy potentially further dampening sentiment in the Australian Dollar.

Wednesday, meanwhile, will see a raft of UK data releases, with the publication of the Consumer Price Index for December potentially benefiting the Pound.

However, Brexit developments are likely to overshadow much of Wednesday’s data, with the outcome of Tuesday’s vote being the most influential factor on the GBP/AUD exchange rate next week.

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