Pound to Australian Dollar (GBP/AUD) and GBP/EUR Exchange Rates Jump on Brexit Divorce Deal Possibility

29 November 2017 by News Desk   |   SHARE  

The pound exchange rate has rallied against currencies such as the Australian Dollar (GBP/AUD) and Euro (GBP/EUR) on hopes a Brexit divorce deal could soon be made and talks could turn to trade, say industry experts FC Exchange.

Reports the UK could be one step closer to a Brexit divorce deal has buoyed the pound against other major currencies this morning, including the euro (GBP/EUR) and Australian Dollar (GBP/AUD).

Sterling rallied as it came to light a £50 billion divorce settlement could be on the table which may appease EU negotiators that have set a 4th December deadline for the UK to show ‘sufficient progress’ has been made. The UK needs to provide clarity on not only the amount it’s willing to pay to leave the currency bloc, but also the rights of EU citizens, and the Irish border—the latter may be a tricky topic to resolve.

If the UK could move onto trade talks with the EU by the end of the year, sterling would likely have some support as the chance of a disorderly Brexit in 2019 slims.

As a result of the news, the GBP/AUD exchange rate hit a fresh 14-month high. Additionally weighing on the Aussie is a slowdown in iron ore prices, Australia’s largest commodity. Thursday will be an interesting day for the Aussie dollar exchange rate with the release of some domestic data ahead of next week’s highly influential ecostats and developments including the Reserve Bank of Australia (RBA) interest rate decision and bulletin.

Meanwhile, in the Eurozone, there’s been some positive news in the form of ecostats. Employment expectations in the currency bloc have boomed to hit a 32-year high. Additionally, Eurozone companies are currently the most optimistic they’ve been since the Global Financial Crisis (GFC). The European Commission reported an increase in both business and consumer confidence in the month of November, with consumer confidence hitting its highest level since January 2001.

There’s still some influential ecostats due out in the rest of the week, including German inflation numbers later today followed by Eurozone labour market and inflation data on Thursday. UK manufacturing numbers will be out on Friday. However, Brexit developments ahead of the 4th December meeting are likely to be the most influential source of movement for sterling at present.

The GBP/EUR exchange rate has hit highs of 1.1326 in today’s session. The GBP/AUD exchange rate has reached levels of 1.7695.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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