Brexit woes continue to put pressure on the Pound, will GBP/AUD breach 1.80 again this year?

Australian Dollar Volatile as it Awaits Labour Force Report as GBP Rises on BoE Rate Cut Bet Reversal

After spending a number of weeks lodged just below the 1.80 mark where there was clearly resistance, the GBP/AUD rate has now dropped off from these levels owing to the concerns surrounding Brexit.

With time running out to agree terms with the EU, the UK Government must first address their own differences, although there is little time left and the panic is beginning to be reflected within the currency’s value.

Yesterday the sell-off accelerated after some poor inflation data lessened hopes of an interest rate hike from the Bank of England in August. Then, later in the day former Foreign Secretary Boris Johnson gave a scathing review of the current Brexit plan. This caused the Pound to sell-off even further and Johnson claimed that it’s not too late to save Brexit although the current plan puts us in a state of permanent limbo.

The pressure on Sterling has come at a time whereby the Aussie Dollar has been strengthening, owing to some better than expected economic data releases. The jobs market has been an area of concern for Australia after the number of new jobs created had been dropping throughout the year, causing some economists to warn of a slowdown in the economy down under.

In the past 24-hours some much better than expected figures were released which initially resulted in quite a big boost for the Aussie Dollar, which pushed GBP/AUD down to 1.75 as AUD strengthened. There were only 16,700 new jobs expected to be created in May, but we now know the actual figure was 59,000 new jobs. This figure is a big jump on the previous figures as so far this year the average was around 14,000.

Economists aren’t expecting to see an interest rate hike from the Reserve Bank of Australia until at least the middle of 2019. This would leave the base rate at the record low of 1.5% which is where it’s been trading for the past 23-months.

This presents a potential downside for AUD as there is a rate hike expected from the Bank of England before then, and should this take place I would expect to see the Pound climb vs the Aussie Dollar.

For further insight into how these and other factors have the potential to affect GBPAUD rates, you can get in touch with me by calling in on 01494 725 353 or by emailing me using