Pound Pushes Back against Australian Dollar (GBP/AUD) despite Rise in Risk Sentiment
The Pound Australian Dollar (GBP/AUD) exchange rate has risen today, with GBP gaining around 0.3% on the Australian currency.
Having started off weakly, the Pound pushed back and made some gains against AUD, with the GBP/AUD exchange rate currently sat at an inter-bank rate of AU$1.79.
Taking today’s Pound strength into consideration, over the past week the ‘Aussie’ has gained over 1.5% against GBP in this pairing since 6 November.
Brexit Anxieties and UK Unemployment Help to Limit GBP/AUD Exchange Rate
Brexit remains at the forefront of traders’ concerns, with UK Prime Minister Theresa May set to propose her ‘endgame’ in an attempt to reach a deal with the European Union.
Nevertheless, Sterling (GBP) exchange rates rebounded after British Cabinet Office Minister David Lidington said a Brexit divorce deal was still possible in the next forty-eight hours, adding that he remained ‘cautiously optimistic’.
Market anxieties regarding Brexit stem from the undeniable fact that the UK is running out of time to seal a deal as the March 2019 leaving date looms closer.
A meeting in Downing Street today will likely not deliver a new Brexit plan, instead the Prime Minister will be updating her cabinet on the state of negotiations, which will undoubtedly focus on the issue of the Irish border.
In terms of data, UK labour figures were released today which showed that unemployment edged higher in the three months to September, from 4% to 4.1%.
Despite this, September’s average weekly earnings showed an increase from 2.8% to 3%, and excluding bonuses, from 3.1% to 3.2%, which lent support to GBP exchange rates.
Australian Dollar (AUD) Exchange Rates Gain Following US-China Trade Talk Rumours
The Australian Dollar (AUD) jumped earlier on reports that Chinese Vice-Premier Liu He was intending to travel to the US this month, sparking hopes of a potential trade truce.
Should the meeting take place, it would happen before a scheduled meeting between US President Donald Trump and Chinese Premier Xi Jinping ahead of the G20 meeting at the end of November, and would potentially demonstrate a thaw in relations between the two countries.
The ANZ Roy Morgan Weekly Consumer Confidence Index was also released on Monday, showing an increase from 116.8 to 119.8.
This demonstrates that consumer confidence is on the rise in Australia, and is currently at its highest levels since late July.
Pound Australian Dollar (GBP/AUD) Outlook: Inflation and Wage Data in Focus
Some UK inflation data will be released tomorrow, taking the form of the Consumer Price Index (CPI), with a predicted increase from 2.4% to 2.5%.
If forecasts are accurate, this could give the Pound a boost against the Australian Dollar (GBP/AUD), as it means inflation will have fallen behind average earnings for another month.
Australia’s wage price index, which comes out overnight, is expected to show domestic Q3 wage growth will remain the same as the previous reading, meaning GBP/AUD is more likely to be driven by changes in UK inflation data and Brexit sentiment tomorrow.