The pound has seen a rocky ride against the Australian dollar this week as uncertainty over Brexit and the House of Commons vote on the Brexit bill slowly comes to a head. Politics continues to be the main driving force for sterling exchange rates and the potential date of the 9th March for invoking Article 50 means the next few weeks could throw up some surprises for the pound and for the GBP AUD pair.
The House of Commons passed the Brexit bill last night without any amendments by a large majority. Although the bill must now pass through the House of Lords where things could become delayed it seems unlikely that this will now happen especially considering the vote in the House of Commons was won by 494 votes to 122. No country has ever left the EU before so it would be unwise to think this will be a smooth process. The reaction and stance from EU27 is unclear and this is creating the currency volatility as the exit negotiations have not even begun. Those clients needing to buy or sell Australian dollars would be wise to make contact to be kept in the loop with any substantial market movements.
The Australian dollar is likely to be impacted by two US Fed members who are speaking later today. The Aussie is impacted by events in the US especially as the focus there surrounds how many interest rate increases the US Fed are likely to make this year. Any suggestions that there is likely to be another US hike in March could see the Aussie weaken as funds return to the US following the higher rates on offer.
The Australian dollar is relatively well supported at present with the recent rise in the price of oil and other commodities. As Australia is regarded as a commodity currency considering its huge exports markets as well as being a major exporter of iron ore then the dollar is susceptible to shocks in the price of commodities. When there is a rise in these prices in the global arena the Australian dollar normally increases in value and this is what has been happening in recent weeks.
If you would like further information on sterling or Australian dollar exchange rates or any of the major currencies and to discuss how we can assist 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]