GBP/AUD Exchange Rate Stabilises as UK MPs in Deadlock over Brexit ‘No-Deal’
The Pound Australian Dollar (GBP/AUD) exchange rate is steady today and is currently trading within the region of $1.7783.
The Pound (GBP) has stabilised against the Australian Dollar (AUD) as MPs return to Parliament to discuss Prime Minister Theresa May’s Brexit deal.
Some Pound investors have been generally reassured by news that senior Conservative MPs have taken a stance against a possible ‘no-deal’ Brexit scenario, with former Cabinet Office Minister Sir Oliver Letwin stating ‘the majority of this house will not allow a no-deal exit to occur’.
The Australian Dollar has failed to recover from yesterday’s slew of disappointing data, with the release of Australia’s trade balance figures showing a worse-than-expected decrease to 1,925M from October’s 2,013M.
Pound investors, however, will be awaiting the Bank of England’s Governor Mark Carney’s speech later on today, with any dovish comments potentially weakening the Pound to Australian Dollar exchange rate.
Pound Australian Dollar Exchange Rate Static as Thinktank Reveals Polarised Government
Confidence in the Pound (GBP) remained steady against the ‘Aussie’ (AUD) today, despite the release of a survey from a thinktank called The UK in a Changing Europe, which revealed that just 17% of Conservative MPs approved of May’s Brexit negotiations, while a further 70% disapproved.
Professor Anand Menon, director of the thinktank, said:
‘The House of Commons is clearly very divided. . . It is hard to see, given the numbers, how the Prime Minister can get her deal through.’
However, with an increasing divide between Parliament and the government, fears are mounting about the possibility of a ‘Trump-style’ government shutdown if May pushes for a Brexit ‘no-deal’, thus leaving investors in a state of uncertainty as debate recommences.
Australian Dollar Pound (AUD/GBP) Exchange Rate Steadies as Australian Building Approvals Show ‘Significant Pullback’
The Australian Dollar was further hit today after Australia’s building approvals fell to a five-year low, with the release of today’s year-on-year figures for November plummeting -32.8% in the last year.
Kaixin Owyong, an economist at the National Australia Bank, commented:
‘Today’s data shows an ongoing significant pullback in residential apartment approvals, a sign that builders, unsurprisingly, are less keen to add to the residential pipeline in an environment of falling prices in Sydney and Melbourne.’
Following this, the risk-sensitive Australian Dollar failed to gain any ground on the Pound despite the US-China trade debates wrapping up today.
Ted McKinney, US Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs, commented: ‘It’s been a good one for us,’ – although his comment came without further elaboration, leaving some ‘Aussie’ investors feeling cautious.
GBP/AUD Outlook: Brexit Debates Back in Spotlight
GBP investors will be looking ahead to tomorrow’s release of the year-on-year BRC like-for-like retail sales figures for December, with any signs of an increase potentially providing a leg-up for Sterling.
Tomorrow, however, will also see a slew of Chinese data releases, with any signs of the economy returning to form likely benefiting the struggling ‘Aussie’.
If there is any more news forthcoming about a possible US-China trade agreement the risk-sensitive ‘Aussie’ could see some benefits.
However, as Brexit debates are set to heat up ahead of next week’s vote, the GBP/AUD exchange rate is likely to be sensitive to headlines.