GBP/EUR, GBP/AUD Climb as Markets Anticipate a Softer Brexit, Australian Employment Data Ahead18 January 2018 by FC Exchange
Currency experts FC Exchange explain why the pound is performing well, and discuss what could impact the Aussie this week.
The pound has been trending higher against the euro (GBP/EUR) and Australian dollar (GBP/AUD) on Wednesday afternoon as news that a softer Brexit might occur kept investors interested in sterling. Rumours that Spain and the Netherlands want a soft Brexit for the UK and strong ties after the UK leaves the EU has helped to buoy the British currency, which has recently achieved its highest level against the US dollar (GBP/USD) since the Brexit vote.
In the rest of the week, investors will be looking forward to Thursday’s UK house price balance data and Friday’s UK retail sales numbers, as well as a host of speeches made by central bankers. Thursday will see European Central Bank (ECB) representatives talk in Frankfurt, alongside the International Monetary Fund’s (IMF) Christine Lagarde. UK retail sales are expected to come in at 2.6% on the year in December which could bode well for the pound, while comments from ECB representatives have the impact to shake-up the euro.
Additionally unfolding in the UK, is the collapse of Carillion, one of the UK’s largest construction companies. British banks have now put in place emergency measures to help small businesses that are being plunged into uncertainty following the collapse. Since the news that Carillion is going into liquidation hit markets, there have been concerns over mass job losses and fears that many smaller companies would face big financial losses as they were owed money by the construction giant.
Meanwhile, in Australia, the Aussie has been surging against the US dollar pushing close to the 0.80 barrier. The Australian home loans ecostat rose by 2.1% in November on the month aftre forecasts had suggested no growth would occur. Investors are looking towards Thursday’s employment change and unemployment rate figures to determine AUD exchange rate movement.
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