The pound to Australian dollar exchange rate has moved higher towards 1.80 for the GBP AUD pair having found support after the historical vote in the House of Commons on Tuesday this week. UK Prime Minister Theresa May was able to win the vote of no confidence in the government which took place last night having been put forward by Labour leader Jeremy Corbyn. The Brexit negotiations continue to be the main driver for GBP to AUD and the markets now await a statement from the British prime Minister on Monday having lost her vote by a staggering 230 votes.
The pound has found some support as it is becoming increasingly clear that there is not a majority in the house of Commons for a no deal Brexit, even though the default option in the event of a no deal is enshrined in law. The markets at least appear to be feel more relaxed that a no deal is not a likely outcome anymore and this is helping to support the price of sterling. Clients looking to buy or sell Australian dollars are likely to see a hugely volatile period in these coming weeks ahead of the UK’s withdrawal from the EU 29th March 2019.
UK retail sales date are released tomorrow where a small drop is expected although the headline figure should nonetheless look healthy taking into account spending on the high street over the festive period. Next week sees important unemployment data which also includes the wage growth numbers, something the Bank of England monitors very closely to determine its monetary policy.
The Australian dollar meanwhile is also struggling as continuing concerns over global growth hamper AUD to GBP. With a serious trade war still yet unresolved between the US and China and evidence of a downturn in the global economy the Australian dollar could be set for some tough times ahead. There are talks of China looking to stimulate their economy through injections of cash and also tax cuts which could help see a boost of the Australian dollar although these measures may take some time to have any effect.
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