Pound Australian Dollar Exchange Rate Fluctuates as Brexit Deal Under Pressure
The Pound Australian Dollar (GBP/AUD) exchange rate is trading erratically as PM Rishi Sunak’s post-Brexit deal struggles to win over sceptics.
At time of writing the GBP/AUD exchange rate is trading around $1.7738, relatively unchanged from this morning’s opening levels.
Pound (GBP) Undermined by Brexit Jitters
The Pound is struggling for demand this morning once again as a lack of economic data left it exposed to mounting domestic woes. Optimism over the Northern Ireland protocol deal is fading as fast as it arrived, with former prime minister Boris Johnson vocal in his objections.
Speaking at a conference in London, Johnson said he would find it ‘very difficult’ to back the plan. With a growing chorus of opposition to the Windsor Framework from within the Conservative party, Sunak faces an uphill battle to win favour. Growing pressure from within the Democratic Unionist Party (DUP) is also adding to the gloom. Johnson added:
‘We must be clear about what is really going on here. This is not about the UK taking back control. This is the EU graciously unbending to allow us to do what we want in our own country, not by our laws, but by theirs.’
Australian Dollar (AUD) Supported by Upbeat Chinese Data
Meanwhile, the Australian Dollar is enjoying modest success this morning as stronger-than-expected PMIs from China buoyed market sentiment.
Business activity in the service sector improved at a stronger pace than expected and printed at 55.0 in February. Jumping from 52.9 in January, services improved at the fastest pace in activity since August of last year. The continued relaxation of strict Covid rules helped lift both demand and customer numbers.
As the world’s second largest economy continues to recover, global market moods will no doubt benefit, boosting the risk-sensitive ‘Aussie’.
Pound Australian Dollar Forecast: BoE Speech to Sour Sterling?
Looking ahead, the Pound Australian Dollar exchange rate could see further movement with a speech from Bank of England (BoE) Executive Director for Markets Andrew Hauser. With previous speeches from central bank failing to inspire confidence in investors, another dovish speech could see the Pound slip.
Meanwhile, with the trading calendar thin on the ground until next week, the Australian Dollar will be left to market sentiment. With strong Chinese data buoying moods, elevated risks of interest rate hikes could cap any significant gains.