GBP AUD is being driven this week by developments in the Brexit negotiations which went into the fifth round of the negotiations this week. The pound has seen a hugely volatile few weeks after the change of stance from the Bank of England where an interest rate is expected in the coming months and the growing uncertainty over Brexit.
There is a 50% chance that the Bank of England will raise interest rates at the November meeting whilst the markets have fully priced in a rate hike by February 2018. A rate hike would be good news for sterling Australian dollar exchange rates but the uncertainly of Brexit is likely to keep the pound under pressure.
Those clients looking to buy Australian dollars with pound would be wise to consider all options as in these markets anything can happen very quickly. The stalemate with Brexit negotiations is something to be very aware of as any speeches from the Prime Minister or other EU leaders can have a direct impact on rates.
Those clients with looking to buy or sell Euros with Australian dollars could see an interesting few days after the Catalonia outcome expected very shortly.
Westpac consumer confidence down under is released overnight and can be seen as a good barometer on the state of the Australian economy and how resilient consumers are. The Reserve Bank of Australia have raised concerns over the strength of the Australian dollar so it may be a matter of time before the conversation moves towards additional stimulus or at least talk of a possible interest rate decrease. This is widely regarded as jawboning and can see the dollar react very quickly.
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]