November 30, 2020 - Written by John Cameron
STORY LINK Pound to Australian Dollar (GBP/AUD) Exchange Rate Rises as UK Faces ‘Significant’ Week of Brexit Talks
GBP/AUD Exchange Rate Edges Higher as UK Mortgage Approvals Rise
The Pound to Australian Dollar (GBP/AUD) exchange rate rose by 0.2% today, with the pairing currently fluctuating around AU$1.807.
The Pound (GBP) rose today despite growing concerns over UK-EU trade talks, which appear to show no signs of the two sides coming to an agreement on a post-Brexit trade deal.
Michel Barnier, the EU’s Chief Negotiator, commented last week that the EU was now ‘not far from a take it leave it moment’.
Dominic Raab, the UK Secretary of State for Foreign Affairs, commented:
‘We're down to really two basic issues, but I think in particular the issue around fisheries. I do think this is a very significant week, the last real major week, subject to any further postponement of the goalposts in terms of the timing.’
As a result, UK markets are concerned that the UK could leave the EU without a trade agreement at the end of the year.
In UK economic news, today saw the release of October’s UK Mortgage Approvals, which beat forecasts and rose to 97.5 thousand.
Analysts at Reuters commented:
‘British lenders approved the most mortgages in more than 13 years in October, Bank of England data showed on Monday, suggesting no let-up yet in a post-coronavirus lockdown bounce-back in the country’s housing market.’
Australian Dollar (AUD) Struggles as Australia-China Tensions Escalate
The Australian Dollar (AUD) struggled today amidst growing concerns over trade tensions between China – the world’s second largest economy – and Australia.
This follows an Official Chinese twitter account sharing an alleged ‘fake image’ accusing Australian of war crimes in Afghanistan.
Australian Prime Minister Scott Morrison said that Beijing should be ‘utterly ashamed’ for sharing the image, sparking further tensions between the two nations.
Mr Morrison admitted there were ‘undoubtedly’ tension between the two nations, but added: ‘This is not how you deal with it’.
As a result, ‘Aussie’ investors are becoming increasingly jittery, as a fallout between China and Australia would severely compromise Australia’s economic recovery.
GBP/AUD Outlook: Could Sterling Fall as a No-Deal Brexit Looks More Likely?
Australian Dollar (AUD) traders are awaiting tomorrow’s interest rate decision from the Reserve Bank of Australia (RBA).
However, the RBA is expected to hold rates at record-lows of 0.1%. But any downbeat commentary about Australia’s economy would be AUD-negative.
Australia-China relations will also remain in focus.
If Beijing continues to exacerbate tensions between the two sides, then the Australian Dollar would suffer.
Brexit developments will drive the GBP/AUD exchange rate this week.
As a result, we could see Sterling begin to shed its gains if a no-deal Brexit appears more likely by the end of the week.
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TAGS: Pound Australian Dollar Forecasts