GBP/AUD Exchange Rate Fluctuates as Brexit, Trade Uncertainty Builds
The Pound to Australian Dollar (GBP/AUD) exchange rate experienced some considerable volatility last week as the pairing was rocked by another surge in both Brexit and trade uncertainty.
The start of the week saw Brexit front and centre once again, with GBP exchange rates racking up serious losses following the resignation of two senior cabinet ministers in protest of Theresa May’s Brexit plan.
However, Brexit took a back seat mid-week when markets were rattled by the Whitehouse’s decision to press ahead with plans to implement additional tariffs with China.
This stoked considerable fears of an imminent trade war between the US and China and saw the Australian Dollar (AUD) retreat as risk appetite stalled.
There was more volatility to come for the GBP/AUD exchange rate however, with the Pound yo-yoing on Friday as Donald Trump offered conflicting views on whether May’s Brexit plan would prevent a free trade deal with the US.
Australian Dollar (AUD) Exchange Rates Stall as Chinese Growth Slows
The start of this week’s session sees the Australia Dollar (AUD) getting off to a slow start following the publication of China’s latest GDP figures.
According to data released by China’s National Bureau of Statistics (NBS), Chinese GDP slowed from 6.8% to 6.7% in the second quarter, the slowest pace of growth since 2016.
With the Australian economy being intrinsically linked to China’s due to the high volume of trade between the two nations, the news had a negative impact on ‘Aussie’ sentiment.
Pound (GBP) Exchange Rates Hold Steady Ahead of Brexit Customs Bill
At the same time Pound Sterling (GBP) exchange rates appear to be holding steady this morning as markets await a key Brexit vote in the House of Commons later today.
MP’s will vote on the government’s post-Brexit customs bill, with Brexit hardliners set to amend the bill in an attempt to force Theresa May to alter the plan agreed to by the cabinet at the start of the month.
While May is not expected to face defeat today, markets fear that a considerable swell in opposition from her own party could weaken her position as PM, an outcome which is unlikely to spur confidence in Sterling.
GBP/AUD Exchange Rate Forecast: UK Employment and Inflation Figures in Focus Ahead of August BoE Meeting
Looking ahead, movement in the GBP/AUD exchange rate could be equally wild this week as markets brace for the release of the latest UK employment and inflation figures.
These will be the final major UK data releases ahead of the Bank of England’s (BoE) next policy meeting in a little over two weeks and consequently will be a major gauge of whether the BoE is likely to commit to an August rate hike.
However with some mixed results forecast, Pound Sterling (GBP) exchange rates could be set for volatility.
Meanwhile, AUD investors will be gearing up for the release of Australia’s own employment figures, with an expected lift in employment growth potentially strengthening the Australian Dollar (AUD) on Thursday.