Pound to Australian Dollar Rate Weakens ahead of Key Brexit Vote on Tuesday (James Lovick)

Pound to Australian dollar exchange rates have fallen lower after what was a good rally in the GBP AUD pair. Rates for GBP vs AUD are currently sitting below 1.78 for the pair.

Brexit continues to dictate the direction of travel for the pound and yesterday’s performance in the House of Commons only highlights the uncertainty that the pound faces. The meaningful vote in parliament which is being debated this week will take place on Tuesday 15th January and high volatility for the pound to Australian dollar is expected in the run up to and after this event.

The screws were turned on UK Prime Minster Theresa May yesterday after the government lost an important vote in the House of Commons. An amendment put forward by Dominic Grieve was controversially allowed to be voted on despite the speaker John Bercow receiving advice that it should not be allowed. There could now be some implications from this government defeat adding another layer of uncertainty in the Brexit debate.

The pound is taking losses against all of the major currencies this morning and the markets may now be beginning to price in the prospect of another general election in the UK or possibly an extension of Article 50 which could even include another referendum. There is also talk of cross party support to try and find a compromise on Brexit which could result in gains for the pound. It is the prospect of a no deal Brexit though which is still a strong possibility and is preventing the pound from jumping much higher against the Australian dollar.

Economic data down under is light as we end this week although UK Gross Domestic product numbers released tomorrow could result in some market reaction for the pound to Australian dollar rate of exchange. Chinese trade balance data released on Monday will be particularly important as the markets evaluate how much of a negative impact the trade wars are having on the Chinese economy. There are real concerns over the performance of the Chinese economy at the moment and this has a knock on effect on the Australian dollar. Those with pending requirements for buying or selling Australian dollars face a very volatile week ahead with the trade data and of course the vote in the British parliament which the government at the time of writing is expected to lose.

For assistance in making transfers at excellent commercial rates of exchange in either direction then please feel free to contact me James. My email address is jll@currencies.co.uk

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