GBP Climbs on Soft Brexit and Retail Sales, but GBP/AUD Trends Lower
14 December 2017 by News DeskWhile the pound exchange rate rallies, currency experts FC Exchange explain why sterling is falling against the Australian dollar (GBP/AUD).
The pound had a good start to the day on Thursday as it rose against the euro (GBP/EUR), US dollar (GBP/USD) and other major currencies, but still experienced some weakness against the Aussie (GBP/AUD) as trading went on.
The British currency managed to climb as Theresa May experienced a political defeat regarding the final Brexit Bill. PM May had hoped that parliament wouldn’t be given the choice to vote on the final deal, believing that it would slow down progress.
For May, Thursday was meant to be a celebration, but Tory rebels saw her four votes short of winning the vote in the House of Commons and now lawmakers will be able to veto the deal she makes in Brussels. Former Attorney General Dominic Grieve, the figurehead for the Wednesday vote, insists that he was fighting strongly for the 48% of UK citizens that voted to remain in the EU in the June 2016 referendum, but was not attempting to derail Brexit.
Additionally, on Thursday, the pound gained some support from UK retail sales numbers which showed an increase of 1.5% on the year in November, up from the previous month’s 0.0% and forecast 0.2%.
Retail Economics representative Richard Lim commented: ‘These figures confirm that online won the Black Friday battle. Online sales growth dwarfed that of in-store as shoppers took advantage of Black Friday discounts, particularly in electricals. However, some retailers will be concerned that the Black Friday boost has come at the expense of traditional Christmas trading. Many consumers are likely to have pulled forward their seasonal purchases to make their budgets stretch further this Christmas.’
The Australian dollar managed to surge by around 1.0% against the US dollar (AUD/USD) on bets that the US Federal Reserve would likely slow its pace for rate hikes as US inflation concerns continue. Additionally, the latest Westpac consumer sentiment reading showed an upswing in December, coming in at 3.6% following November’s -1.7%.
Meanwhile, the Eurozone produced some impressive figures of its own on Thursday. The Eurozone’s manufacturing purchasing managers’ index (PMI) for December came in at 60.6, while the services PMI came in at 56.5.
The pound to euro (GBP/EUR) exchange rate has reached levels of 1.1385 so far today. The GBP/AUD exchange rate has hit highs of 1.7580.
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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