GBP/AUD started Wednesday on a positive note, gaining 0.14% so far, to 1.8794. The price made a u-turn after touching a support level at 1.8755.
The pair has pointed downwards since Monday amid Brexit uncertainty, but now it can rest a bit on increased optimism.
UK Parliament Backs Brexit Bill
The British pound is now dependent on Brexit developments. UK Prime Minister Boris Johnson reached a deal with European leaders last week but failed to secure the parliament’s support on Saturday, with more MPs voting against it amid a meaningful vote.
Now the PM has to go the hard way by passing the so-called Withdrawal Agreement Bill (WAB) through both the House of Commons and the House of Lords, which requires more time.
Yesterday, lawmakers voted in favor of the Brexit bill for the first time since the referendum, but minutes later they rejected the tight timeline. Thus, Johnson is forced to break his promise of taking the UK out of the bloc by October 31, but at least he’s on the right track now. The PM said:
“Just a few weeks ago, hardly anybody believed that we could reopen the Withdrawal Agreement, let alone abolish the backstop, and certainly nobody thought that we could secure the approval of the House for a new deal.”
On the other side, the EU leaders said that they would support a delay.
CBI Industrial Orders to Lowest Levels in a Decade
GBP still remains under pressure as British manufacturers anticipate their orders to decline at the fastest rate in about ten years during the next quarter. The negative trend is driven by the Brexit uncertainty and slowing global economy, according to a survey carried out by the Confederation of British Industry (CBI) on Tuesday.
The CBI announced that its manufacturing orders tumbled to -19 in the three months through October from +10 in the previous three months, which is the lowest reading since April 2009.
In monthly terms, the indicator declined to -37 in October from -28 in September, below analysts’ forecasts and the lowest level since March 2010.
CBI chief economist Rain Newton-Smith commented:
“A combination of Brexit uncertainty and weaker global growth are clearly hitting sentiment and export prospects, with job prospects at their weakest since the global financial crisis.”