GBP to AUD exchange rates remain on the back foot as the details over the future political declaration for Brexit are scrutinised. The EU agreed over the weekend the withdrawal agreement and political declaration which spells out what the future trade relationship will look like. So far the deal as it stands has attracted much hostility from large swathes of Parliament, which makes it very difficult for Prime Minister Theresa May to push the deal through in the House of Commons.
Brexit vote expected on December 12th
A vote is expected be held in Parliament on the 12th December. This is the crucial date to be marked in the diary. If Theresa May is unable to push through this deal then there is likely to be a sell-off in sterling as the markets should begin to start factoring in the prospect of a no deal scenario. Judging by the numbers in Parliament it seems unlikely that she will win this vote on the agreement in its current form. The EU have also stated that they are unwilling to renegotiate the Brexit deal which could leave a gloomy outlook for the GBP to AUD rate.
The UK will officially leave the European Union in March of next year and it is the type of deal that Britain and the EU agree which will help determine the future path for GBP exchange rates.
G20 talks could impact AUD rates
The Australian dollar could face a volatile week when the G20 summit stars this Thursday. The big item on the agenda is for a meeting between China and the US to discuss future trade relations. If an agreement is not worked out then there could be further tariffs on trade. This is seen as negative, not just for China but for the wider global economy.
This is why the Australian dollar could react to any news at this meeting, as the Aussie is perceived as a riskier currency. Anything positive should however be seen as positive for the Aussie dollar and there could be a move higher in the AUD to GBP rate. The Australian dollar has been further boosted after recent strong employment data down under which could help persuade the Reserve Bank of Australia to raise interest rates next year.
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