The Pound slumped against the Australian Dollar after Brexit took another step closer to actuality, while Australian Dollar demand soared after highly supportive trade balance stats.
GBP AUD Exchange Rate Tanks as House of Commons Approves Brexit Bill
The Pound dropped heavily against the Australian Dollar today, due to a negative response to MPs approving the Article 50 bill.
This allows the Government to trigger Article 50 and begin the process to remove the UK from the EU, although the bill still needs to pass through a gauntlet of amendments and further approval votes before this stage.
As well as this step closer to Brexit concerning investors, the fact that UK construction has slowed by more than expected in January has also limited GBP demand.
The Australian Dollar has benefitted from a surge in demand today, with December’s trade surplus showing a rise from 2.04bn to 3.51bn, far above the forecast 2.2bn figure.
Other Australian news has concerned Donald Trump; Trump allegedly hung up on a call with Australian PM Malcolm Turnbull when discussing previous immigration plans, which has worsened international relations considerably.
Pound Sterling Australian Dollar Demand Tied to Commons Bill Amendments
The next long-term influence on the GBP AUD exchange rate is likely to be the successful implementation of any amendments to the Article 50 bill as it makes its way through both houses of Parliament.
The general outlook is that amendments could reduce the damaging impact of Brexit once Article 50 is triggered, by implementing clauses to keep the UK part of specific EU institutions.
Although Labour MPs were divided over whether to approve the bill in the first place, the party has proposed a significant number of amendments, as have the Scottish National Party, so the chances remain that the Pound will be boosted on approved amendments in the near-term.
Future Australian Dollar Demand May Depend on Unlikely AU-US Reconciliation
While the Australian Dollar has risen considerably after the US Dollar crashed on the Trump-Turnbull call, it may not have similar fortune in the future.
Given that relations between Australia and the US are currently at a low-point in the wake of the refugee incident and the US withdrawing from the Trans-Pacific Partnership (TPP), further deterioration in the international relationship may cause a decline in demand for the Australian Dollar.
On the flipside of this situation, the Australian Dollar Pound exchange rate could well climb in the future if the increasingly unstable US is substituted with China as a more viable business partner, an idea that has been tentatively tabled ever since the TPP withdrawal.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.65 and the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.60.
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