The Pound to Australian Dollar (GBP/AUD) exchange rate topped a six-month high last week and continued to climb in Monday’s European session. The gain in Sterling has been attributed to renewed Brexit hopes and an ebbing risk-appetite for the Trans-Tasman currencies.
The US Dollar’s decline last week caused currencies such as the Aussie and the Kiwi (NZD) Dollars to fall as investors sought safer assets.
Sterling attained a two-week high against the US Dollar on Friday (GBP/USD) after a sharp Dollar selloff occurred. It’s been reported that a subpoena requesting documents from US President Donald Trump relating to Russia emerged in October.
Bloomberg has stated that people familiar with the matter said that Special Counsel Robert Mueller served Trump the subpoena in mid-October signalling that the criminal campaign is being actively pursued.
The political uncertainties in the US have seen a decline in risk appetite leaving the Aussie to fall. Also pressuring the Australian Dollar are the large stockpiles of iron ore, meaning gains in the commodity’s value or steel might be extremely limited in the near future. Iron ore is Australia’s largest commodity and therefore any developments in its pricing can impact the Australian currency.
However, Australian data failed to impress last week, with Australian Employment Change coming in at only 3.7K, far below the 18.8K forecast. Despite this, Australian unemployment did manage to decline to 5.4% from 5.5%. The Aussie had a bad week, not only falling to a six-month low against the Pound, but also a five-month low against the US Dollar (AUD/USD).
In the week ahead investors will be looking towards the Reserve Bank of Australia’s (RBA’s) meeting minutes release and followup press conference with central bank Governor Philip Lowe on Tuesday.
The Pound to Australian Dollar (GBP/AUD) exchange rate is trending in the region of 1.7533, approximately +0.56% higher.