GBP/AUD Exchange Rate Flat as MPs Seek to Block No-Deal Brexit
Updated: The Pound Australian Dollar (GBP/AUD) exchange rate remained in a narrow range on Thursday afternoon after UK parliament passed an amendment seeking to prevent the next Prime Minister from forcing through a no-deal Brexit.
The amendment will frustrate any attempts by the next PM to prorogue parliament, ensuring MPs remain able to block no-deal, much to the relief of GBP Investors.
GBP/AUD Exchange Rate Holds Ground Following Strong Retail Sales Figures
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning as markets welcome the publication of the UK’s latest retail sales figures.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.7723, leaving the pairing virtually unchanged from this morning’s opening rate.
Pound (GBP) Buoyed by Rebound in Sales Growth
Whilst the Pound (GBP) is flat against the Australian Dollar (AUD) so far this morning, Sterling is accelerating against the majority of its other peers following the release of some upbeat retail sales figures from the UK.
According to data published by the Office for National Statistics (ONS) sales growth rebounded from -0.6% to 1% in June, storming past forecasts that sales would have contracted a further 0.3%.
The surge in retail sales was welcomed by GBP investors as analysts suggested the strong performance last week may be enough to prevent the UK economy from contracting in the second quarter.
Australian Dollar (AUD) Buoyed by Rise in Full-Time Employment
Meanwhile, the Australian Dollar (AUD) was able to hold off the Pound’s (GBP) advances this morning thanks to the publication of Australia’s latest jobs report.
Whilst total employment growth almost stagnated last month, AUD investors appeared upbeat thanks to a strong pick-up in full-time employment, which offset the fall in part-time positions in June.
This helped to boost the ‘Aussie’ on expectations its will relieve some of the pressure on the Reserve Bank of Australia (RBA) to continue easing its monetary policy.
GBP/AUD Exchange Rate Forecast: Brexit Jitters to Keep Pressure on Sterling
Looking ahead, the outlook for the Pound Australian Dollar (GBP/AUD) exchange rate looks rather bleak as persistent Brexit uncertainty threatens to drive Sterling lower.
In its latest fiscal risk report the Office for Budget Responsibility (OBR) warns that the Pound is likely to plummet and the UK risks falling into a recession in the event of a no-deal Brexit
‘The big picture is that heightened uncertainty and declining confidence deter investment, higher trade barriers with the EU weigh on domestic and foreign demand, while the Pound and other asset prices fall sharply.
These factors combine to push the economy into recession.’
Meanwhile, any near term movement in the Australian Dollar is likely to be driven by the release of Australia’s CPI figures next week, with a potential rise in inflation in the second quarter offering some support to the ‘Aussie.