Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Soars on ‘Promising Signals’ from Ireland

October 11, 2019 - Written by John Cameron

STORY LINK Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Soars on ‘Promising Signals’ from Ireland

Pound Australian Dollar (GBP/AUD) Exchange Rate Jumps as EU Agree to ‘Intensify’ Brexit Discussions

The Pound Sterling Australian Dollar (GBP/AUD) exchange rate soared and the pairing is currently trading at around AU$1.8626.

Sterling was buoyed by Brexit optimism as European Council President Donald Tusk said that he had received ‘promising signals’ from Irish Taoiseach Leo Varadkar.

This afternoon saw the Pound rise higher as the European Union gave the go-head for more ‘intensified’ talks to take place, and in a statement the European Commission said:

‘The EU and the UK have agreed to intensify discussions over the coming days.’

The development came after a meeting in Brussels between the UK Brexit Secretary Stephen Barclay and EU chief negotiator Michel Barnier.

Meanwhile, the news saw banks become more optimistic about the Pound, with Deutsche Bank stating it was no longer negative on Sterling.

The bank’s foreign exchange strategist, Oliver Harvey told clients:

‘This represents a significant change of tune by the Irish government, that has so far been relatively pessimistic about the prospect of talks moving forward.’

Australian Dollar (AUD) Slumps despite US-China Trade Optimism

On Friday, the Australian Dollar rose against a handful of currencies, buoyed by US-China trade optimism.

However, this could do little to buoy the ‘Aussie’ against Sterling after the Brexit optimism sent the UK currency higher.

On Thursday, China’s Vice Premier Liu He and other senior officials met with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer for around seven hours of talks.

Risk appetite rose as the first day of high-level trade talks ended with increased hopes for a limited US-China trade deal.

Comments from US President Donald Trump reiterated plans to meet Liu on Friday and said that the US ‘had a very, very good negotiation with China’.

Added to this, a White House official stated the talks had gone well, ‘probably better than expected’.

Pound Australian Dollar Outlook: Will a Dovish RBA Send AUD Lower?

Looking ahead to next week, the Australian Dollar (AUD) could extend its losses against the Pound (GBP) following the release of the Reserve Bank of Australia’s (RBA) meeting minutes.

If the RBA’s meeting minutes reveal the bank is looking to slash rates further, the ‘Aussie’ could slide.

Meanwhile, Brexit is likely to remain one of the main catalysts for movement in Pound exchange rates.

If there is further news suggesting the likelihood of the UK securing a Brexit deal before the deadline has increased, the Pound Australian Dollar (GBP/AUD) exchange rate could rise.

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