The Pound dropped suddenly against the Australian Dollar (GBP/AUD), US Dollar (GBP/USD), Euro (GBP/EUR), and Canadian Dollar (GBP/CAD) on Thursday as David Davis and Michel Barnier held a joint press conference on Brexit.
Brexit Talks See Sterling (GBP) Exchange Rate Tumble Over -0.60%
Michel Barnier has been the cause of other sudden Sterling drops in recent months, such as when he told the UK to ‘get serious’ about negotiations in a cutting move that surprised markets. On Thursday Barnier signalled that he’s not ready to discuss the Brexit transition as the UK and the EU have reached a ‘deadlock’ on money, which is ‘very disturbing’.
The Pound went off a cliff edge as Barnier suggested both parties were at a deadlock, leaving the British currency to drop by around -0.62% against the US Dollar to 1.3154, -0.65% against the Euro (GBP/EUR) at 1.1093, -0.83% against the Australian Dollar at 1.6821, and -0.46% versus the Canadian Dollar at 1.6413.
Aussie Dollar (AUD) Exchange Rate Bolstered, RBA Financial Stability review Ahead
Meanwhile, the Australian Dollar enjoyed a boost this week after consumer inflation expectations noted an upswing from 3.8% to 4.3% in September. In addition, the value of Australian mortgage lending spiked to the highest level on record in August, surging on the back of a jump in investor loans. The Australian Bureau of Statistics (ABS) noted an increase of 2.1% on the month, while the annual figure achieved lofty levels of 8.0%. However, it’s likley that investor growth will be closely watched by regulators and the Reserve Bank of Australia (RBA) and there may be some Aussie Dollar fluctuations attributed to the upcoming RBA Financial Stability Review if the central bank comments on the rise.
Canadian Dollar (CAD) Climbs on Rising Oil Prices
The Canadian Dollar has enjoyed some strength this week following a weaker US Dollar and a rally in oil prices. As export cuts by Saudi Arabia help to rebalance the market, crude futures climbed by around 2.7% to reside at levels of US$50.92 per barrel.
EUR, USD, GBP Exchange Rate Forecasts
Positive numbers out of the Eurozone have helped to buoy the Single Currency to achieve a two-week high versus the US Dollar (EUR/USD). Eurozone Industrial Production rose to 3.8% on the year in August, up from 3.6% the previous month, despite economists predicting a fall. The EUR exchange rate could be in for some further movement this afternoon when European Central Bank (ECB) President Mario Draghi speaks.
It’s likely the Pound will continue to fluctuate throughout the day as markets digest the political ramifications of the current Brexit talks on the UK economy.
The Pound is forecast to fluctuate significantly on Friday against the US Dollar (GBP/USD) when a slew of high-tier US economic data is released, such as US inflation, Advance Retail Sales, and University of Michigan Consumer Confidence.