GBP/AUD Exchange Rate Rangebound, UK Awaits Parliament Brexit Withdrawal Agreement Vote
The Pound Australian Dollar (GBP/AUD) exchange rate held steady today, with the pairing currently trading around AU$1.892 after the UK’s GDP figure for the third quarter was revised up to 0.4%, doubly confirming that Britain avoided a Brexit-related recession.
The Office for National Statistics (ONS) said that the revision reflected ‘increased levels of volatility in the first half of the year that largely reflects changes in the timing of activity related to the UK’s original planned exit date from the European Union in late March.’
Today also saw the release of December’s UK GfK Consumer Confidence figure, which beat forecasts and rose from -14 to -11 due to anticipation ahead of 12th December general election.
The GBP/AUD exchange rate has, however, remained unmoved today with Brexit firmly in focus as Parliament is set to pass the Brexit Withdrawal Agreement Bill later on today
With Prime Minister Boris Johnson’s updated bill including a ban on a Brexit transition period beyond late 2020, the Pound has weakened this week due to markets being increasingly nervous over the prospect of a cliff-edge Brexit next year.
AUD/GBP Exchange Rate Steady on Rising US-China Trade Deal Hopes
The Australian Dollar (AUD) has continued to benefit from markets pricing in a US-China ‘phase one’ trade deal with softening trade risks benefiting the risk-averse ‘Aussie’ today.
Shaun Roache, Chief Economist at S&P Global Ratings, was more mixed in his response, however, saying:
‘It looks like on the tariff side, the phase one deal has taken some risk of escalation off the table for 2020. Markets have priced that in clearly. It’s this other aspect of the relationship, that’s more to do with technology, non-tariff measures where it’s much more complicated. The risks of escalation is much higher and actually it’s where we think the long term impact is much greater.’
With tech disputes between the worlds’ two largest economies remaining uncertain, the AUD/GBP exchange rate has remained steady today with concerns that a trade deal could quickly be rolled back due to Washington’s tough technological restrictions on Beijing.
GBP/AUD Outlook: Brexit and US-China Trade Developments in Focus
Looking ahead to next week, the GBP/AUD exchange rate will continue to be driven by Brexit developments, with any further indications of a possible no-deal cliff-edge scenario EU weakening the Pound.
Meanwhile, the Australian Dollar will continue to be driven by US-China trade developments. Any signs of a ‘phase one’ trade deal being inked in by Beijing and Washington would boost the risk-averse ‘Aussie’.