GBP AUD Exchange Rate Recovers Last Week’s Losses
No-deal Brexit fears have not been enough to keep the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate low. Instead, the Pound (GBP) remains resilient on hopes for a UK-EU Brexit deal to be reached soon.
After opening last week at the interbank level of 1.81, GBP/AUD spent most of the week holding its ground before ultimately ending lower at the level of 1.80.
GBP/AUD’s losses were short-lived though. Yesterday saw the pair quickly rebound and recover all of last week’s losses.
This morning, GBP/AUD continues to climb. The pair trends above last week’s opening levels.
Today’s Reserve Bank of Australia (RBA) news had little impact on the outlook but the Australian Dollar (AUD) remains appealing overall.
Pound (GBP) Exchange Rates Resilient as Officials Offer Optimistic Comments on Brexit
The Pound took a hit towards the end of last week. Investors found the Pound unappealing as fears over a possible no-deal Brexit intensified due to a lack of perceived progress in negotiations with only a month until the end of the Brexit transition period.
However, despite UK Prime Minister Boris Johnson’s insistence that the transition period won’t be extended into 2021, speculation persists that this could happen.
Not only that, but UK and EU officials showed optimism over negotiations once again this week, despite time running out.
Analysts at ING said:
‘The waiting game for GBP continues, but we can expect more days of contradicting headlines driving intraday oscillations in GBP’
Australian Dollar (AUD) Exchange Rates Lack Drive as RBA Unsurprising
Last night saw the Reserve Bank of Australia (RBA) hold its December policy decision. The bank left monetary policy frozen as expected, and it had little impact on the Australian Dollar outlook.
GBP/AUD is climbing today, but analysts say the Australian Dollar remains appealing overall. A combination of global coronavirus recovery hopes is keeping the ‘Aussie’ outlook supported.
The RBA was also optimistic about Australia’s economic outlook, which is further boosting AUD appeal. RBA Governor Philip Lowe said:
‘The economic recovery is under way and recent data have generally been better than expected,
This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support.’
Pound to Australian Dollar (GBP/AUD) Exchange Rate Awaits More Key Australian News
Australia’s economic outlook is fairly solid as the nation recovers from the coronavirus pandemic. Comments that economic performance has been better than expected are keeping the ‘Aussie’ appealing.
The Australian Dollar’s outlook could strengthen further if tomorrow’s Australian growth rate results for Q3 beat forecasts. Australia’s economy was expected to have grown at 2.6% quarter-on-quarter in Q3.
If this beats expectations it could boost hopes that Australia’s economy was resilient amid the coronavirus second wave. This would make the Australian Dollar outlook even more appealing.
If Australian growth data is strong, GBP/AUD may struggle to hold its recovery attempt.
As for the Pound, Brexit negotiations will remain the primary focus. If UK-EU officials show any progress in talks the Pound could strengthen.
However, a bigger return of no-deal Brexit fears could keep the GBP AUD exchange rate nearer the week’s lower levels.