GBP/EUR at 1.12, GBP/AUD at 1.73 after Confidence Data and Brexit Bank News
21 December 2017 by News DeskCurrency experts FC Exchange take a look at why the pound is falling against the Australian dollar (GBP/AUD) and euro (GBP/EUR) this week.
The pound sank to 1.12 against the euro (GBP/EUR) on Thursday and 1.73 against the Australian dollar (GBP/AUD) as Brexit stepped into tricky waters and UK consumer confidence slipped. Analysts had predicted UK sentiment would hold steady in December at -12, but the latest index showed a decline to -13 instead – a four-year low.
Head of Market Dynamics at GfK which measures the confidence index stated: ‘We need to see several issues move on before the downward trend of the consumer mood changes. We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise. But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.’
Meanwhile, the Brexit back and forth between the UK and EU has been reignited again with debate on financial institutions post-Brexit. EU negotiator Michel Barnier said: ‘There is not a single trade agreement that is open to financial services. It doesn’t exist. In leaving the single market, they lose the financial services passport.’
Meanwhile, Bank of England (BoE) Governor Mark Carney showed his Christmas cheer by saying that the central bank will be forging plans to allow European banks to continue on as normal after Brexit, with no extra charges or regulations.
Carney said: ‘I don’t accept the argument that just because [a trade deal on the topic of financial services] has not been done in the past, you can’t do it in the future.’
Meanwhile, in Australia, the Reserve Bank of Australia (RBA) ended the year on a somewhat positive note with an upbeat outlook for some areas of the economy. While it was positive regarding the labour market and hoped wage growth had stabilised and would begin to pick up, it was pessimistic about household consumption. While the Aussie dollar initially picked up on the news, it soon fell lower when markets weighed both the central banks positive and negative comments.
The pound to euro (GBP/EUR) exchange rate has fluctuated between levels of 1.1245 and 1.1268. The pound to Australian dollar (GBP/AUD) has hit highs of 1.7483 and lows of 1.7355.
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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