GBP/AUD is slightly up in early trading on Wednesday, but still under pressure to continue the bearish mood.
Yesterday, the pair broke the lower side of a symmetrical triangle, suggesting a steep downtrend was just around the corner. However, the price withstands and awaits Brexit updates that might change its direction.
One British pound buys 1.8747 Australian dollars as of 05:20 AM UTC, up 0.04% so far.
Australia’s Inflation in Line with Expectations
A few hours ago, the Australia Bureau of Statistics (ABS) published inflation data for the third quarter. Thus, the consumer price index (CPI) slowed to 0.5% last quarter from 0.6% in Q2. The indicator accelerated by 0.1% to 1.7% year-on-year. All figures were in line with analysts’ expectations.
Bruce Hockman, ABS Chief Economist, gave further details:
“Annual inflation remains subdued partly due to price rises for housing related expenses remaining low, and in some cases falling in annual terms. Prices for utilities (-0.3%) and new dwelling purchase by owner-occupiers (-0.1%) both fell slightly through the year to the September 2019 quarter, while rents (0.4%) recorded only a small rise.”
UK Economy Will Lose Pace Under Johnson’s Deal
The current Brexit deal, agreed between Prime Minister Boris Johnson and European leaders, might leave the British economy 3.5% smaller every single year, the National Institute of Economic and Social Research (NIESR) said in a recent paper. The Bank of England might be forced to cut the interest rate to support the gross domestic product (GDP) growth.
The institute concluded that the Brexit chaos has already affected growth. If the UK doesn’t change its current mood of ongoing uncertainty, the GDP will lose 2% of output.
Jagjit Chadha, director of NIESR, explained:
“The UK economy will continue to suffer what we’re calling a ‘slow puncture. No pop, no bang, but a slow puncture, as investment is deferred and delayed in the face of uncertainty.”
Yesterday, the UK parliament finally approved Johnson’s bid for an early election. The House of Commons voted for the motion by a margin of 438 against 20. Thus the national poll, which may pave the way for Johnson’s Brexit plan, will be held on December 12.