GBP/AUD Exchange Rate Steady in ‘Calm before the Storm’?
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trading in a neutral range at the start of this week, as markets brace for what is expected to be another chaotic week of Brexit developments.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8387, slightly up from the week’s opening rate.
Pound (GBP) Set for another Week of Brexit Turbulence?
While the Pound (GBP) is currently buoyed against the Australian Dollar (AUD) and the majority of its other peers this morning, this is not likely to last long as we face another week of Brexit drama.
This will mostly revolve around whether or not the EU will be willing to grant Theresa May another Brexit delay as well as the length of said extension if it is granted.
Guy Stear and Klaus Baader, analysts at Société Générale, said:
‘This week is likely to be overshadowed by events relating to Brexit. Another short extension has been requested by the UK, but the EU may prefer a longer delay while setting strict conditions and requiring participation in the EU parliament elections.’
If the EU rejects May’s request for an extension then the UK looks set to crash out of the EU without a deal at 23:00 BST on Friday – an outcome that will likely trigger a sharp drop in GBP exchange rates.
Australian Dollar (AUD) Softens as Domestic Job Adverts Fall
Meanwhile the Australian Dollar (AUD) opens this week on an unsteady footing, drifting lower against the Pound (GBP) as data showed a sharp fall in Australian job advertisements last month.
According to data published but ANZ Bank, domestic job adverts fell by around -1.7% in March, the fifth consecutive month of contraction, resulting in a 6% fall year-on-year.
While the release would generally not be seen as a major catalyst for movement in the ‘Aussie’, the Reserve Bank of Australia’s (RBA) renewed focus on labour figures appears to have unnerved some AUD investors.
GBP/AUD Exchange Rate Forecast: Sterling’s Fate in the Hands of the EU as Leaders Deliberate on Brexit Delay
Looking ahead, we can expect to see trade in the Pound Australian Dollar (GBP/AUD) exchange rate become increasingly erratic as we gear up for another week of explosive Brexit developments.
This will mostly be focused on the upcoming EU summit of leaders, where national leaders will decide whether or not to grant the UK a stay of execution on Brexit.
Outside of Brexit, Sterling (GBP) may also face some pressure from the release of the UK’s latest GDP figures later this week as economists forecast the UK’s economy will have stagnated in February.
Meanwhile, the main catalyst behind the Australian Dollar (AUD) this week will likely be any further developments on the US-China trade front, with the ‘Aussie’ likely strengthening if there is any further evidence that the two may be close to signing off on a new trade agreement.
On top of this we will also have the release of Australia’s latest consumer confidence figures, which may exert some downward pressure on AUD if sentiment continues to slide in April as forecast.