UK Prime Minster Theresa May is dominating headlines this morning, following her Commons embarrassment over a key Brexit vote.
May has flown to a summit in Brussels, hours after Conservative rebels backed an amendment to give them the final vote on any final Brexit deal.
This was seen as a backhanded move by many and once again undermines the PM’s position.
It seemed as though the government were finally making progress in Brexit negotiations but this hurdle could heap pressure on Sterling over the coming days.
GBP/AUD rates have remained fairly flat despite these developments, with the pair still trading above 1.75.
Investors risk appetite for the Pound may well deteriorate as this story develops, so it could be time to lock in any short-term GBP/AUD currency positions and avoid the risk of a potential downturn.
Sterling has made gains of late and this improvement has been supported by what seemed like a breakthrough in Brexit talks. It was also boosted by an underlying concern regarding rising property prices in Australia’s most affluent cities Sydney & Melbourne and a drop in demand for Australia’s vast supplies of raw materials.
The Australian economy is heavily reliant on their export industry, so any dip in this sector generally has a negative knock on effect for the AUD.
Looking at the UK and although there has been no confirmation of the details of a potential Brexit deal, it seems as though agreements have been made over the Irish border set-up, the protection of EU nationals and the final settlement figure (rumoured to be as much as 50 billion EUR), that the UK will pay to the EU following its separation.
Whilst this is still being touted as the next step, reports over the past couple of days have indicated that the UK & the EU were not necessarily on the same page. Brexit secretary David Davis indicated in an interview over the weekend that the touted “divorce” bill was not binding and would not be paid if the UK did not receive an advantageous trade deal.
This was widely criticised and rebuffed by key EU figureheads and could put pressure on Sterling over the coming days.
As such I would be tempted to take advantage of Sterling’s current levels and remove any risk in what is still an extremely uncertain market.
If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
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