The pound has rocketed against all of the major currencies including the Australian dollar today breaking over 1.70 for GBP AUD before retreating in afternoon trade.
Sterling exchange rates have a had a good week following strong mortgage approvals data earlier on Tuesday highlighting a buoyant housing market which is a key feature of the British economy and is usually one of the first areas to struggle in uncertain times.
The strong mortgage approvals from the Bank of England give some reassurances to the market that the UK economy is still performing well in the aftermath of the vote to leave the EU.
The lift today for sterling exchange rates appears to have come from comments from Brexit Secretary David Davis who suggested that he was open to paying into an EU budget to maintain access to the single market. This represents a so called soft Brexit which is perceived as better for the pound and the markets took this news well.
Events Next Week – GBP AUD
Clients needing to buy Australian dollars should be aware of two major events taking place imminently. The first is the Italian referendum on constitutional reform this Sunday. A no vote could work in the pounds favour in this instance.
The second event is the Supreme Court ruling on whether UK Prime Minister Theresa May must consult Parliament to push through Article 50. Should Theresa May lose the appeal then the pound is likely to gain across all of the major currencies as the process of Brexit will be frustrated and potentially delayed.
A win by Theresa May would mean a tougher Brexit more likely which could see the pound weaken.
If you have an upcoming currency requirement either buying or selling Australian dollars and 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@example.com