Sterling has dive bombed as Theresa May hints that a hard Brexit is more likely as she outlines to pursue control of law and immigration. It is notable she has stated the only mistake here are anyone who implies in advance what the PM is really seeking in negotations. So whilst this GBP weakness may turn out to be unfounded much longer term for now it seems likely to persist. GBPAUD rates could easily test 1.60 or maybe even lower.
It isn’t all bad news as there is a strong likelihood the pound will rise on the Supreme court judgement which is expected to confirm Theresa May will need to seek the approval of parliament before triggering Article 50. This should lead to sterling rising as it makes apparent the Government will not have a clear path to their goals. There are all manner of wider interests in the UK seeking to derail Theresa May’s plans and the passage through parliament will not be easy on any bills. The UK might even need another election to ‘debate’ Theresa May’s vision.
So all in all I expect the pound to remain lower against the Aussie as it makes apparent that the pound will be the driver. There has lately been lots of good news in the Australian economy with some forecasting the RBA might be forced to raise interest rates later in the year. For now the strength of the US dollar is acting as a big drag on both the the pound and Australian dollar which will present swings.
On the whole I expect this market to favour clients selling AUD for sterling and clients looking to buy Aussies with pounds need to be paying extra attention and making extra effort to avoid problems. If you wish for some assistance to monitor the exchange rates and pick the spikes then you are reading the right blog. I work as specialist currency broker helping and assisting clients looking to buy and sell Australian dollars with the most up to date news and market insight. For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading, I hope you find this useful and I welcome any feedback on the post or enquiries on GBPAUD transfers.