Pound Australian Dollar (GBP/AUD) Exchange Rate Left Muted as PM Pushes for Brexit Deal
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate remained muted and the pairing is currently trading at around AU$1.8857.
On Monday afternoon, House of Commons Speaker John Bercow decided not to allow a ‘meaningful vote’ to take place later that day.
Bercow said that since a motion on Boris Johnson’s deal had already been brought before MPs at the weekend, debating it again would be ‘repetitive and disorderly’.
Meanwhile, Sterling was left under pressure on Tuesday as the Prime Minister is to urge MPs to back his deal.
If lawmakers back Johnson’s Brexit withdrawal agreement, they will then be asked to approve a thorough three-day timetable to consider the legislation.
Despite Brexit uncertainty, the Pound has been able to remain largely stable against the Australian Dollar so far this week as markets believe that a disorderly Brexit is very unlikely.
However, some analysts believe that Sterling will remain jittery, and UBS Global Wealth Management’s Mark Haefele said:
‘Short term focus will now be passing Johnson’s deal. On balance, we think that the legislation will not be passed in time for an end of October departure, forcing an extension. We expect the EU will accept this extension rather than face a no-deal, although their decision may not be immediate.
‘Following the large moves in Sterling over the last two weeks, we will likely see further volatility in the days ahead as the next phase of Brexit unfolds.’
US-China Trade Optimism Leaves Australian Dollar (AUD) Flat
The Australian Dollar edged up early on Tuesday as China’s Vice Foreign Minister Le Yucheng said that the US and China had achieved progress in trade talks.
However, Brexit optimism buoyed the Pound and left the pairing largely muted later in the morning.
Beijing’s vice foreign minister also added that any problem could be resolved providing each side respected the other, and that no country could prosper without working with other nations.
Speaking on Tuesday, Le said:
‘As long as we respect each other and seek equal cooperation, there are no disagreements that cannot be resolved between China and the United States.
‘What China wants is to deliver a better life for the Chinese people. We don’t want to take anything from anyone else. There’s no such thing as China replacing anyone or threatening anyone.’
Added to this, positive comments from US President Donald Trump over the weekend buoyed risk appetite.
White House advisor Larry Kudlow also noted that tariffs planned for December will likely be withdrawn if progress is made in talks.
Brexit optimism also helped buoy risk appetite, and commenting on this, Westpac FX strategist, Sean Callow said:
‘There’s been no fresh reason to query the broadly positive mood after the meeting in Washington.’
Pound Australian Dollar Outlook: Will a Dovish RBA Assistant Governor Weigh on AUD?
Looking ahead to this evening, the Pound (GBP) could edge up against the Australian Dollar (AUD) as MPs will begin a series of votes on the Prime Minister’s Brexit bill.
If the House of Commons votes in favour of the Withdrawal Agreement Bill this evening, it could provide Sterling with a fresh upswing in support.
Meanwhile, the Australian Dollar could slump following a speech from the Reserve Bank of Australia’s (RBA) Assistant Governor Christopher Kent.
If Kent mentions monetary policy and focuses on the ongoing high unemployment rate the bank is trying to tackle, the Pound Australian Dollar (GBP/AUD) exchange rate is likely to rise.