As the first day of December draws to a close, the Pound to Australian Dollar exchange rate has worsened.
The pairing opened trading on Friday around the 1.7804 region, but later tumbled to a lower rate of 1.7715.
The trader uncertainty was partly linked to next week’s Brexit-events, which will include a key meeting between Theresa May and Jean Claude-Juncker, among other developments.
(First published December 1st, 2017)
In a dramatic reversal of fortune, the Pound has fallen sharply against the Australian Dollar today because of voiced concerns about Irish border negotiations.
The Australian Dollar has been in high demand by comparison and may be on track for even greater gains against the Pound next week.
Irish Border Doubts could Foreshadow GBP/AUD Rate Crash
The Pound has plummeted against the Australian Dollar recently, despite the best reported November manufacturing reading in four years.
Summing up the UK stats, Duncan Brock of the Chartered Institute of Procurement and Supply said;
‘Encouraging global market forces provided the foundation for the strongest rise in activity for 14 months, and a renewed confidence and focus in the manufacturing sector.
We wait with bated breath to see if the EU negotiations manage to derail this accomplished end to the year or lift the sector to new heights with a clear path ahead for the UK’.
Those EU negotiations are responsible for today’s GBP decline, with traders abandoning Sterling after gloomy remarks from a Brexit committee.
The Pound previously soared when it was speculated that UK officials could quickly reach an agreement on the Irish border aspect of Brexit negotiations.
Since then, the committee has warned that proposals are ‘untested’ and ‘to some extent speculative’.
Clear divisions remain between the UK and EU, as well as the UK and Ireland itself.
If these problems aren’t solved before a mid-December meeting to discuss Brexit progress, the Pound to Australian Dollar exchange rate could nosedive.
Hints of RBA Interest Rate Hike could Strengthen AUD/GBP Exchange Rate
Confidence in the Australian Dollar has risen today, thanks to better-than-expected levels of national manufacturing activity.
During the month in November, the activity index has risen from 51.1 points to 57.3, much better than the anticipated 54 point reading.
Looking ahead, the Australian Dollar could make further gains after the Reserve Bank of Australia (RBA) interest rate decision on December 5th.
RBA officials are tipped to leave rates at 1.50% in December, but could still provide forward guidance for 2018’s rate decisions.
Australian banks including ANZ and NAB predict at least two RBA rate hikes in the coming year, so any official implications on the matter could inspire a notable AUD/GBP rate rise.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound to Australian Dollar (GBP AUD) exchange rate was trading at 1.7804 and the Australian Dollar to Pound (AUD GBP) exchange rate was trading at 0.5611.
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