Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Rebounding as Investors Digest 2019

Pound to Australian Dollar Exchange Rate Rebounds in Post-Festive Trade

Market movement has been quiet for most of the past week, with many major markets closed to observe the festive holiday period, and this has meant limited Pound Sterling to Australian Dollar (GBP/AUD) exchange rate movement.

Following last week’s GBP/AUD plummet from the interbank level of 1.19 to 1.18, the pair has seen more modest losses this week so far.

GBP/AUD has trended slightly lower in the region of 1.18 and briefly touched on its worst level in over a month.

At the time of writing on Friday, GBP/AUD was trending a little closer to the week’s opening levels again as investors adjusted positions.

However, while the Pound (GBP) is seeing a slight rebound today following days of quiet trade, the British currency’s outlook remains overwhelmed by Brexit uncertainties.

Pound (GBP) Exchange Rates See Limited Rebound as Brexit Uncertainty Clouds Outlook

Despite a lack of notable fresh support for the Pound (GBP) in recent sessions, the British currency is experiencing a modest rebound in demand today.

Following days of pressured performance and quiet trade over the festive holiday period, the Pound rebounded slightly before markets closed for the week.

Investors bought the Pound back from lows today, adjusting positions and buying the currency back from its cheap levels.

However, amid a lack of solid support for the British currency, Sterling’s outlook remains highly limited by concerns that a cliff-edge Brexit is possible at the end of 2020. According to Analysts from TD Securities:

‘Investors enjoyed a brief post-election honeymoon when the risk of a no deal crash out was considered all but eliminated. These hopes have diminished, although we note that the end-2020 potential cliff edge remains far off in the distance.’

Australian Dollar (AUD) Exchange Rates Jittery as Market Risk-Sentiment Shifts

During Friday’s Asian session, the Australian Dollar (AUD) experienced a jump in demand as quiet holiday trade was followed by a rise in market trade sentiment.

Earlier in the month, the US and China finally announced that a ‘phase one’ deal had finally been reached following years of mixed negotiations and tensions.

With the deal expected to be signed imminently and hopes that relations would remain fairly solid into 2020, the trade and risk-correlated Australian Dollar saw a rise in demand.

Some stronger than expected Chinese industrial profits data this morning also boosted market demand for trade-correlated currencies like the Australian Dollar.

The Australian Dollar slipped against the Pound during the European session today, but overall the more optimistic trade outlook and recent speculation of a less dovish Reserve Bank of Australia (RBA) have kept the Australian Dollar supported.

Pound to Australian Dollar (GBP/AUD) Exchange Rate Awaits Final Data of the Decade

The Pound to Australian Dollar (GBP/AUD) exchange rate is seeing mixed movement amid quiet festive trade today, but is overall likely to continue trading with a downside bias amid a lack of support.

The Pound (GBP) continues to face pressure amid expectations for Brexit uncertainty throughout 2020, and next Monday’s UK finance mortgage approvals stats are unlikely to be particularly influential.

The Australian Dollar (AUD) could drive some GBP/AUD movement in the coming sessions though.

Key Chinese manufacturing data from NBS will be published on Tuesday, the final day of the year. This data, as well as any fresh US-China trade speculation, could influence the Australian Dollar before the end of the year.

Later next week, the 2020 outlook will come into increased focus for GBP/AUD investors.

Australian and Chinese manufacturing data will influence the Australian Dollar, while the Pound could be influenced by upcoming UK manufacturing PMI data on Thursday.

Of course, any surprising developments in the Brexit process could also influence the Pound to Australian Dollar (GBP/AUD) exchange rate.

Josh Jeffery

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