GBP/AUD Exchange Rate Rises as Traders Await Outcome of May’s No-Confidence Vote
The Pound Australian Dollar (GBP/AUD) exchange rate is up today and is currently trading within the region of AUD$1.7909 on the inter-bank market.
The Pound (GBP) gained against the Australian Dollar (AUD) after last night’s Parliamentary vote on Prime Minister Theresa May’s Brexit deal, which saw a shattering defeat of 432 votes to 202 – the largest government defeat in history.
Opposition Labour leader Jeremy Corbyn immediately tabled a motion of no confidence in the government last night, which will see a vote this evening.
Most Pound traders are optimistic that May will succeed her vote of no-confidence this evening, which will reduce the likelihood of a general election, with the PM expected to garner the support of her party.
Brexiteer and Conservative MP, Jacob Rees-Mogg commented:
‘I haven’t heard of any Conservative MP who will not support her.’
James Cleverly, a Conservative MP, also sees May surviving tonight’s no-confidence vote, saying:
‘I have no doubt that the prime minister will win that and then she can focus on trying to thrash out something with the EU and parliamentarians.’
The Australian Dollar, meanwhile, failed to gain this morning after the release of Australia’s Westpac Consumer Confidence figures for January showed a decrease of -4.7%, its worst fall in over three years.
Mathew Hassan, a Senior Economist at Westpac, commented:
‘January reads should be treated with some caution as the Index is adjusted to remove a regular boost to sentiment over the holiday season. However, even allowing for this, the update clearly marks a poor start to the new year.’
Pound Australian Dollar (GBP/AUD) Exchange Rate Rangebound as UK CPI Increases Above Expectation
Mark Carney, the Governor of the Bank of England, is due to deliver a speech today – just 12 hours after last night’s Brexit vote – and will be quizzed about the UK’s financial stability in the shadow of Brexit, with any dovish comments potentially seeing the Pound drop against the Australian Dollar.
The Pound gained some confidence after the publication of the yearly UK Core Consumer Price Index for December which increased above expectation to 1.9%, meaning that inflationary pressures are holding up in the UK economy.
Today also saw the publication of the UK Retail Price Index which increased by 0.4% in December 2018, although this was slightly below expectations.
This were followed by the publication of the UK PPI Core Output figures for December, which showed a better-than-expected increase.
AUD/GBP Exchange Rate Drops as Australia Consumer Confidence Falls Most in Three Years
The ‘Aussie’ has generally failed to gain following the rise in the Chinese yuan today, which has benefited from volatility in the Eurozone and the Brexit vote, with some traders fleeing to safe-haven currencies.
Australian Dollar traders have also been left unmoved by the surge in lower grade iron ore prices, which soared to their highest level in 16 months yesterday.
GBP/AUD Forecast: No-Confidence in May Could See Sterling Plummet
‘Aussie’ investors, meanwhile, will be looking ahead to tomorrow’s publication of Australia’s home loans figures for November which are expected to decrease.
These will be followed by HIA new home sales figures for December, with any signs of an increase potentially benefiting AUD.
However, the GBP/AUD exchange rate will be heavily affected by the outcome of this evening’s vote of no-confidence levied at Theresa May, with any signs of the PM’s position being threatened liable to see Sterling plummet.