We are now just a short period away from the Australian federal election and the voting is likely to be very close. In fact the rumours are heating up that it may even be a hung parliament.
Typically when an election is very close and a hung parliament occurs this causes the currency involved to weaken, in this case the Australian Dollar.
When this happened a few years ago in the UK and the Tories combined forces with the Liberal Democrats the uncertainty during the period of the hung parliament caused Sterling to struggle and I think we could see some weakness for the Australian Dollar vs Sterling early next week if we see this outcome.
The good news for Australian Dollar sellers recently has been the impact of the Brexit vote which has caused GBPAUD rates to plummet and also the political landscape in the UK is highly uncertain at the moment.
Prime Minister David Cameron has announced his resignation as of October and currently the UK is searching for a new Prime Minister. Labour is also in turmoil with a few senior members resigning as they do not want Jeremy Corbyn as their leader.
The next week will be interesting for the Australian Dollar as it is unusual for both countries to be politically uncertain at the same time. Therefore, I expect volatility for Sterling vs the Australian Dollar and it is difficult to predict which way rates will go in the short term.
If you’re either buying or selling Australian Dollars in the next few weeks or months then you may wish to choose to buy a forward contract which allows you to secure your exchange rate for the future for a small deposit.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]
I look forward to hearing from you.