Politics is still the name of the game in governing Pound to Australian Dollar exchange rates, with the first weekend of campaigning in the UK General Election making a few investers nervous as we enter into the weekend.
So why the dip?
This is the first weekend of heavy campaigning following the announcement last Tuesday from Theresa May, calling for a snap-election in the UK, which saw Pound to Australian Dollar exchange rates rise to multi-month highs over the course of 36 hours of trading.
However, this weekend’s campagining has made a few investors nervous, which is why Sterling fell away slightly from the recent highs very late on Friday afternoon.
This is the first weekend where each major party will be alluding to what will be key features released in their manifestos, so there is a strong potential for a shift in the polls. Labour have already come out swinging with Jeremy Corbyn stating that Labour will add 4 more bank holidays per year to the calendar if elected.
With so much unknown the Pound weakened, however, should the polls show few surprises on Monday, Australian Dollar buyers can be fairly confident of a recovery as we progress further into the week.
With no news coming out to affect the Australian Dollar until Wednesday with a measure of Australia’s inflation to be released, this will likely be the governing narrative until then.
In such a politically fluid landscape, a premium is put on being a well-informed purchaser, and being able to move quickly to avoid being ‘last to the party’ should any opportunities emerge, or to avoid being ‘caught out’ should rates deteriorate whilst you are busy at work during the day.
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