GBP/AUD Exchange Rate Resilient on Falling Business Optimism
UPDATE: The Pound Australian Dollar exchange rate has held close to opening levels today, with negative news from both sides limiting overall movement.
For GBP traders, disappointment has come from the latest Confederation of British Industry (CBI) data which has revealed falling business optimism about Q4 2018.
The quantity of industrial orders in October is also reported to have fallen, which has rattled GBP traders.
On the Australian side, however, the latest remarks from Reserve Bank of Australia (RBA) official Guy Debelle have limited AUD demand.
The Australian Dollar hasn’t been supported by Mr Debelle’s suggestion that leaving interest rates unchanged is likely to continue for the time being.
GBP/AUD Exchange Rate Slides ahead of PM’s Speech and Firearms Vote
UPDATE: The Pound Australian Dollar exchange rate has fallen by -0.5% today, with high levels of uncertainty about Brexit greatly limiting GBP demand.
An upcoming event that could boost the GBP/AUD exchange rate is a speech from UK Prime Minister Theresa May.
The PM might briefly restore GBP trader confidence and cause Pound gains, provided that she points to an imminent Brexit agreement with the EU.
The more worrying event is a later vote on a bill to ban high-powered rifles in the UK; this has an underlying Brexit angle.
Pro-Brexit MPs are expected to vote against this amendment in an act of defiance towards the Prime Minister, which could reveal the difficulties faced when trying to secure domestic backing for a Brexit deal.
Pound Sterling (GBP) Trades Tightly as Brexit Reaches Crunch Time
Pound Sterling (GBP) is trading in a narrow range against the Australian Dollar (AUD) today, potentially lulled before a major Brexit update.
Prime Minister Theresa May is due to give an update on the Brexit negotiations later today, in a bid to reassure MPs and investors.
November’s provisional deadline for concluding Brexit talks is fast approaching and to stress the need for co-operation, Brexit Secretary Dominic Raab has said:
‘We’re at the end stage of the negotiations. I think it’s understandable that there are jitters on all sides of this debate.
‘We need to hold our nerve; the end is in sight in terms of a good deal – the prize that we want: a good deal with the EU.’
Threat of Minority Government Limits Australian Dollar to Pound (AUD/GBP) Exchange Rate Movement
The Australian Dollar (AUD) has held steady against Pound Sterling (GBP) today, following the news that the Liberal Party has lost its parliamentary majority.
The Liberals formerly held the narrowest of majorities against the opposition, but after the resignation of Prime Minister Malcolm Turnbull and the loss of the PM’s Wentworth seat, there is a risk of it acting as a minority government.
Australian politics is often turbulent and with an election due by May 2019 at the latest, the chances of there being a new government in less than 12 months have just increased markedly.
Beyond the political news, Australian Dollar demand has also been limited today by comments made by Reserve Bank of Australia (RBA) Governor Guy Debelle.
Mr Debelle has suggested that even with unemployment falling to 5% in September, the nation may still not be seeing ‘full employment’.
This is a cautious remark, as it suggests that the pace of wage growth may not pick up in the months ahead. From this, the implication is that the next RBA interest rate hike may still be a long way off.
GBP/AUD Forecast: Will Pound Sterling Rally on PM’s Brexit Speech?
This week, Pound to Australian Dollar (GBP/AUD) exchange rate movement may be caused by remarks from UK Prime Minister Theresa May, another speech from the RBA’s Guy Debelle, and Confederation of British Industry (CBI) data on Tuesday.
First up, the PM is expected to announce that Brexit negotiations are ‘95% complete’ today when she addresses MPs in the House of Commons.
If it looks like a Brexit agreement is within grasping distance then the Pound could rise sharply against the Australian Dollar, given the market relief this could cause.
Later on, RBA policymaker Guy Debelle will be speaking but could keep the Australian Dollar down if he sounds cautious.
The only direct UK data will be Tuesday’s CBI business optimism and industrial orders stats.
These are tipped to show falling business sentiment and a negative reprint for industrial orders – both results could lead to GBP/AUD exchange rate losses.