- Pound receives a surprise boost
- Australian economic outlook positive
An unexpected boost for Sterling, but Brexit is back on the agenda
The Pound was boosted by US President Elect, Donald Trump’s unexpected win and various ‘reassuring’ soundbites from officials. Of particular note was Brexit Secretary David Davis saying that the UK would consider making payments to the European Union (EU) after it leaves the bloc, to secure the best possible access to the EU single market. Mr Davis told MPs that the "major criterion" was getting the best access for goods and services to the European market, "and if that is included... then of course we would consider it."
Since then, the UK government has been making its appeal to the Supreme Court, declaring that a Parliamentary vote is not needed before triggering Article 50. Should the government ultimately win the case, a ‘Hard Brexit’ may be on the cards, which could send the Pound tumbling. While the government appeal is expected to end on Thursday, the actual verdict isn’t due until January 2017, so a prolonged period of uncertainty awaits.
Australian economy doing well
Over in Australia, the Reserve Bank of Australia elected to leave interest rates on hold, hinting that the economic outlook is positive going forward. The bounce in commodity prices since Trump’s US Presidential win should boost Australia’s trade going forward.
The other key data release to watch out for will be the Aussie Gross Domestic Product (GDP) for Quarter three, which won’t include the pickup commodity prices and could be disappointing, leading to a slight sell off in the Australian Dollar and giving clients a chance of trading over 1.70.
Buying or selling Australian Dollars?
In terms of the technical analysis, GBP-AUD is currently trading between 1.66-1.7150 range; a break higher would open up a move to 1.73 initially, then onto what was seen as a high in September of 1.7800.
On the downside, a break below 1.66 would open up 1.6400 and onto 1.5800.
Australian Dollar Research Report compiled by Alastair Sweetman
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