GBP/AUD Exchange Rate Steady as UK Granted Brexit Extension
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning after the EU agreed to delay Brexit until 31 October.
At the time of writing the GBP/AUD exchange rate is virtually unchanged this morning, leaving the pairing trading at around AU$1.8276, roughly half a cent down from the week’s opening levels.
Pound (GBP) Gains Limited as UK Faces Prolonged Brexit Uncertainty
While the immediate reaction to the news that the UK has been granted another extension to be Brexit was one of relief, it looks like the Pound (GBP) may not have got the message as it stubbornly remains flat again the majority of its peers this morning.
However GBP investors have good reason to see limited upside in Sterling this morning as far from solving the crisis this has simply ‘kicked the can down the road’ for a few more months.
This leaves the uncertainty of Brexit to hang over UK businesses for another six months, as Edwin Morgan, interim director general of the Institute of Directors explains:
‘Confirmation of a further extension removes the immediate threat of no deal, but will bring little comfort for businesses when so much remains up in the air.
‘Firms don’t want to see more of the same. They want to see politicians build consensus around a way forward that finally breaks the cycle of indecision. ‘
This uncertainty is also likely to continue to limit the appeal of the Pound for the immediate future as well, especially as the prospect of a General election also looms as Theresa May faces the ire of Conservative backbenchers who will be furious that Brexit has been delayed yet again.
GBP/AUD Exchange Rate Forecast: How Might the RBA’s Financial Stability Review Impact the Australian Dollar?
Looking ahead, the Pound Australian Dollar (GBP/AUD) exchange rate may see some movement overnight on Thursday as the Reserve Bank of Australia (RBA) publishes its semi-annual Financial Stability Review.
The review could put some pressure on the ‘Aussie’ as the RBA is expected to warn that downside risks to growth have increased and that household consumption remains weak.
Meanwhile UK politics are likely to be in the spotlight going forward as the prospect of a potential general election in the coming months will keep GBP investors on their toes.