Hung Parliament – Where will GBP/AUD move next?
The conservatives came in well below expectations unable to win a majority victory which has caused a considerable weakening for the pound against the Australian dollar. GBP/AUD now sits at 1.6850. I would be surprised to see further significant losses. Australian Dollar sellers it is time to fill your boots.
Whitehall will be frantic today with promises being made in the attempt to form a coalition. I would expect Sterling strengthen when a coalition is formed, the combination of the coalition will determine by how much. If however Corbyn manages to form a minority government, we could potentially see further falls as this could be deemed negative for the UK economy and Brexit negotiations are predicted to be more problematic. This is worrying as Sir Ivan Rogers former EU commissioner resigned due to unrealistic time scales for exit. He thinks it could take up to ten years for a full exit, negotiations need to run decisively and effectively to avoid the process being lengthened. Parties with differing views could cause the process to become more troublesome.
It seems the most likely outcome would be the conservatives gaining power with the support of Northern Irish unionist parties. I think this would have a positive effect on Sterling. When the Conservatives gained power with the Lib Dems in 2010 GBP/EUR rose by 5 cents.We experienced a hung parliament in 2010 and this lasted for five days, this could give some indication of how long the UK will be stuck in limbo.
If you have a large currency transfer to perform in the coming days, weeks or months then I will be happy to speak to you directly as I will be willing to help you both with trying to time a transaction and getting you the best possible rate when you do come to trade. A small improvement in a rate of exchange can make a significant difference so for the sake of taking a few minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on [email protected] and I will endeavor to get back to you as quickly as possible. Thank you for reading.