The Australian dollar has come under a degree of pressure of late as trade war concerns continue to weigh heavy on the Aussie. The cooling property market down under with considerable falls seen in both Sydney and Melbourne are also attracting concerns from the Reserve Bank of Australia. While the markets are not expecting a property market crash bearing in mind the falls in house prices appear to be coming from two cities, the central bank will nonetheless be in no hurry to raise interest rates which could potentially slow growth.
Rates for GBP AUD are currently sitting at 1.8140 and the two biggest drivers for the pair will be Brexit and the ongoing US trade war with China. The Australian dollar is negatively impacted by the global uncertainty for a slowdown in global growth especially considering that China is such a major export market for Australia.
UK Prime Minister Theresa May was in New York yesterday speaking on Brexit as she tried to reassure business that a deal between Britain and the EU will be reached.
UK Gross Domestic Product figures are released tomorrow morning although the central focus in my opinion will be on the Conservative party conference this weekend. With so much to negotiate in these Brexit negotiations and the difficult task that Theresa May has in finding a deal that will work for the EU but also one that she can get through in parliament then there is considerable risk for the pound over these next two months.
An agreement is expected to be found although any clues as to whether the Chequers deal will fly or if another Canada type trade agreement takes preference will inevitably have a direct impact on the price of sterling exchange rates. With splits in the cabinet over a softer or harder Brexit then this conference in my opinion could give new direction for the price of sterling.
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