The Australian Dollar has started to fight back against the Pound especially towards the end of the week in advance of this weekend’s Tory party conference.
During the last few weeks rumours are circulating that some Tory members are looking for a change in leadership especially the Pro-Remainers in the party.
Theresa May claimed last week during her televised statement that under her leadership there will be no second referendum so some in the party think that their only option is to remove her from power. However, this would be deemed as very dangerous politically and would open the door to Labour.
It will be interesting to see how the Tory conference goes this weekend as if there is more division in the party then I think we could see Sterling exchange rates lower as we begin the week.
There are two other huge stumbling blocks ahead for the Pound with the EU summit due to be held on October 18th. Just over a week ago the Chequers plan was rejected by the European leaders and as yet no other alternative has been offered so currently we are at a stalemate with the discussions which does not bode well for the Pound at the moment.
Depending on how the talks go in the next three weeks the EU may also hold an emergency Brexit meeting in November to try and get a deal agreed between both sides so there is a huge amount of volatility coming in the next few weeks so be prepared for any eventuality.
As we saw in June 2016 when the Brexit vote came out we saw huge losses for the Pound vs the Australian Dollar so I think we could see some huge movements if we do manage to get a deal agreed later this month.
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