The pound to Australian dollar exchange rate has fallen lower overnight with rates for the GBP to AUD pair falling to a low of 1.7653 this morning. As featured yesterday Brexit remains the dominating driver for the pound not just against the Australian dollar but against all of the major currencies. With Brexit appearing to be in stalemate and the continued pressure from opposition parties to seek other options such as a second referendum, general election or cancel Brexit, the list goes on; the uncertainty is putting added pressure on sterling exchange rates. The weekend will inevitably see all the big political beasts doing interviews with the political shows on the TV. Any clues as to what may happen next week could see a volatile start to next week ahead of the crucial parliamentary vote to be held on Tuesday.
As things stand the government is widely expected to lose the vote in the House of Commons on Tuesday. Following that she will now just have three days to return to parliament with a Plan B after she lost a vote in parliament this week which forces Theresa May to act swiftly. How Plan B might look is less than clear and the Prime Minister is reportedly keeping a tight lid on how things will play out from here. The lack of information would suggest a very volatile period for GBP vs AUD next week.
Whilst the pound is falling amidst Brexit uncertainty in these final stages of Brexit the Australian dollar appears to have been boosted following an appreciation in the Chinese Yuans value. As the Chinese currency strengthens this is often seen as good news for the Australian dollar which is a commodity currency and due to the fact China is one of Australia’s most important export markets.
The stronger Yuan is having a positive knock on effect on the Australian dollar. Chinese trade balance data released next week is a data release to pay close attention to as the markets have been showing serious concern as to the strength of the Chinese economy. The trade wars appear to be hitting China adversely and the Australian dollar is likely to be disproportionately affected by any changes in China.
For more information on the Australian dollar and for assistance in making transfers when either buying or selling Australian dollars then please contact me James at [email protected]