GBP/AUD Exchange Rate Buoyed by Brexit Optimism
The Pound to Australian Dollar (GBP/AUD) exchange rate has seen modest gains this morning in response to rising hopes for a UK-EU trade deal.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.7781, up roughly 0.3% from this morning’s opening rate.
Pound (GBP) Rallies on Brexit Hopes
The Pound (GBP) is trending higher against Australian Dollar (AUD) this morning, amid fresh hopes for a Brexit trade deal between the UK and EU.
This comes after the UK made a concession in regards to fishing rights, altering its demand for EU boats to reduce their catch from 60% to 35%.
Also cheering the Pound this morning are reports that France could soon lift its ban of UK freight, easing fears that a prolonged blockade could cause significant disruption to UK supply chains.
David Madden, market analyst at CMC Markets UK, comments:
‘The French government is looking to end the ban on freight coming from Britain and this has helped ease worries with respect to good moving across the English Channel.
‘Yesterday, at the height of the market sell off there were fears that the UK could be given the cold shoulder for a while but the mood is more upbeat today.’
However, subsequent reports have suggested that the EU had rejected the UK’s concessions, resulting in the GBP/AUD exchange rate pulling back from its best levels this morning.
The EU’s Chief Brexit Negotiator Michel Barnier is set to update EU officials on the state of Brexit talks later today, with his comments likely to be closely watched by GBP investors.
Australian Dollar (AUD) Sinks Despite Upbeat Retail Sales
At the same time, the Australian Dollar (AUD) finds itself on the defensive this morning as demand for the risk-sensitive currency continues to be undermined by renewed coronavirus jitters.
This is of course linked to concerns surrounding the emergence of a new, more infectious strain of the coronavirus in the UK and resulting panic which gripped markets on Monday.
However, tempering the ‘Aussie’ losses was the release of some surprisingly strong domestic retail sales figures overnight.
According to preliminary data published by the Australian Bureau of Statistics (ABS), sales growth rocketed up from 1.4% to 7% in November, the largest expansion of sales since May and easily beating forecasts for a 0.6% contraction.
This surge came as the state of Victoria exited lockdown, unleashing a wave of pent-up demand, which coincided with Black Friday sales.