The Australian dollar has seen both gains and losses over the past 24 hours. Various ongoing events have inflicting shifts on the currency and this has both positively and negatively impacted the GBP/CAD interbank exchange rate.
Trouble for both Australia and the United Kingdom
The relationship between GBP and CAD of late is heavily revolving on the current issues in the news. For Australia, a higher push on the Reserve Bank of Australia (RBA) and global trade news ensued that the GBP/AUD trend continued to slowly decline.
On the other side of the water, the UK is still deeply entrenched in it’s Brexit quarrels. The uncertainty of the upcoming UK election as well as Brexit as a whole has weighed down the British pound.
Recovering GBP/AUD relationship but still at low levels
On Wednesday the GBP/AUD interbank rate was sitting at a level of around 1.86. This figure is a slight improvement on the previous week’s lows but is still a loss of around half a cent since Monday. The AUD is hoping to build on its slight increase with support for the currency as hopes rise that the Australian economy will remain resilient. For the GBP it is not as simple. With the campaign trails of each branch of the British political parties ongoing until next month’s election, this GBP volatility is very likely to continue.
The reluctant GBP deflates chances of prosperity
Amidst the GBP’s struggles with Brexit, investors are currently shying away from making moves on the pound. The outlook for the GBP this week resembles much of last week’s trends. Partner this with the AUD’s struggles of its own the GBP/AUD exchange rate is not performing at it’s best of late.
Investors in the GBP will be turning their attention to today’s Bank of England (BoE) policy decision. Analysts expect the bank not to make any changes to monetary policy yet a dovish tone over the economy in the UK may play a part in seeing the GBP slide.
On the other hand, experts report that there is a chance that the GBP/AUD exchange rate could fall if the BoE shows concerns. Current Sterling optimism could lift if investors become worried about the next Brexit deadline. A concoction of election uncertainty, Brexit jitters and recent weak economic statistics could undermine sterling in the weeks to come.
Today will be an important day for both currencies as the Bank of England undergoes its policy decision whilst Australia’s construction Purchasing Manager’s Index (PMI) for October and trade balance for September is released. If these stats impress the AUD is likely to cling to this week’s gains.
For more sterling and Australian dollar news or if you have a currency requirement you can get in touch with me, James Lovick, directly at [email protected], or call +44 (0) 1494 360 899 to discuss these factors in more detail.