Pound Australian Dollar (GBP/AUD) Brexit Remains Key Influence as Talks in ‘Endgame’
The Pound Australian Dollar (GBP/AUD) exchange rate was trading off around a quarter of a percent today, sinking as low as AU$1.79 as Brexit fears remained in the spotlight.
This comes after the Australian Dollar also strengthened on Tuesday after reports US-China talks were likely to take place ahead of the G20 Summit later this month, lowering global risk sentiment.
GBP/AUD Exchange Rate Down as Brexit Reaches Downing Street ‘Showdown’
Prime Minister Theresa May will present her proposed Brexit deal to the cabinet today, with traders awaiting the outcome anxiously.
Market fears remain over whether May can gain the support of her cabinet and progress the deal through Parliament.
Political news aside, the latest UK inflation data was released earlier today in the form of the Consumer Price Index (CPI) reading, which maintained a rate of 2.4% despite a predicted rise to 2.4%.
AUD/GBP Exchange Rate Gets Boost from Potential China-US Trade Talks
The AUD/GBP exchange rate has been gaining today as Brexit anxieties continue to consume the Pound.
And with recent reports that Chinese Vice-Premier Liu He is travelling to the US, the ‘Aussie’ has found some new momentum on heightened risk appetite.
AUD/GBP could see further gains as if US-China trade talks are confirmed.
Today’s Australian Q3 wage price index, which exhibited a slight rise to 2.3% year-on-year after the Q2 figure of 2.1%, offered the Australian Dollar some support.
However, Marchel Theiliant, senior Australia and New Zealand economist for Capital Economics, claimed the seeming improvement was less positive than at first glance, saying:
‘[it is] nothing to get excited about as it was partly driven by an increase in the minimum wage. What’s more, subdued growth in real wages means that households may soon start to respond to falling house prices by curbing spending.’
GBP/AUD Exchange Rate Outlook: Pound in Spotlight as Brexit Deal Reaches Decisive Phase
Looking ahead, a decisive factor for the Australian Dollar (AUD) will be this week’s domestic employment data release due out on Thursday.
Employment has remained steady, and economists are predicting that October will see 20k new jobs added when the data is published, against September’s more modest rise of 5.6k.
GBP/AUD is likely to remain under the influence of Chinese data for the rest of this week, with any decrease in potential ‘trade war’ tensions likely to be AUD positive.