The pound has plunged against the Australian dollar this week following the Conservative government’s party conference in Birmingham. Each day has provided us with strong statements from Prime Minister Theresa May and other senior figures which have had a direct and heavily negative impact on sterling exchange rates.
The fact that Britain is now steering towards a hard Brexit seems to have caught the markets off guard and has been reflected in a sharp weakening in the pound since Sunday.
However the pound has bounced higher today across all of the major currencies after a different kind of statement from Theresa May. She highlighted that such a sustained period of ultra-low interest rates has benefitted those in society with assets resulting in asset bubbles, whilst others have been hindered.
This she tells us is all for change and that she will in effect look to deliver higher interest rates as part of her manifesto. This will not happen overnight but the comments have no doubt helped lift the pound higher today and stopped the dramatic fall.
Australian trade balance data is released tomorrow which could help drive the dollar but it is the UK industrial and manufacturing production figures released on Friday which are likely to shift the pound.
Buyers of Australian dollars could see a short term boost at the end of the week to try and claw back some of the lost ground. Similarly clients selling Australian dollars would be wise to consider moving at the excellent levels which are currently on offer. This volatile period is unlikely to change any time soon.
If you would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]