Pound to Australian Dollar exchange rates saw a visible acceleration and rise towards the end of the week, ending what had been a tentative period for buying Australian Dollar rates, with GBP/AUD knocking for the 4th time in 6 months on the door below 1.60.
Whilst the Pound had been back-tracking against the Australian Dollar in the run-up to Article 50, the overall reaction to the announcement of the beginning of negotiations and the European response was fairly positive.
Questions heading into Friday and the official European reaction to triggering Article 50 was rife. What tone were they going to respond with? Will their negotiation aims be similar to our own? Will they allow us to negotiate on future trade relations concurrently with negotiations on leaving the EU?
The overall tone was largely accommodating and, crucial to currency markets, the EU council left room for negotiations on future trade relations to begin before we have officially left the EU – allowing the potential for the UK to leave the EU on a better footing.
So what does this mean for the Pound and buying Australian Dollar rates of exchange? Very likely at this point, with negotiations not beginning for another month or so formally, that Brexit discussions will fade into the background for the medium term.
At this point, Economic news seems to be the key determinant on Pound to Australian Dollar rates. UK, US and Australian interest rate decisions are on the debate table this month. All interconnected in deciding whether GBP/AUD will break out of its current mooring in the 1.60’s.
Trends from economic date can emerge quickly to begin the month, and, as such, a premium will be put on being an informed purchaser in these situations, and being in a position to move quickly to seize any potential opportunities that emerge, even if only for a short time.
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