The Pound fell by 5 cents against the Australian Dollar during last month after what has been a very uncertain time politically in the UK.
Prime Minister Theresa May has announced her resignation and we are now in the midst of a leadership election within the Tory party.
The likelihood is that the battle for the next Prime Minister will continue until late July, which means more political uncertainty and this could cause ongoing problems for Sterling exchange rates.
The other problem for the Pound is that the next Prime Minister will likely be more of a Brexiteer and this could increase the risks of a no-deal Brexit.
Personally speaking I don’t think a no-deal Brexit will happen which means that we’re likely to have to extend the October deadline, have a second referendum or even potentially have another general election. All of these options care likely to cause problems for the Pound.
However, in the very near future the Reserve Bank of Australia will be announcing their latest monetary policy overnight. The strong likelihood is that we’ll see the central bank cut interest rates to their lowest level on record of just 1.25%.
If after the interest rate cut they announce that there could be further rate cuts coming then I think this could see GBPAUD exchange rates move in an upwards direction which is good news for anyone looking to buy Australian Dollars at the moment.
The Australian economy has been showing signs of problems recently with employment, economic growth and inflation so I think the RBA will signal that there are further rate cuts to be made but depending on the timelines offered this could cause a lot of movement on GBPAUD exchange rates overnight.
Therefore, if you’re in the process of looking to convert Australian Dollars then pay close attention to the decision made as well as the RBA’s accompanying statement.
I have personally worked for one of the UK’s leading currency brokers for 16 years and I’m confident of being able to save you money on exchange rates compared to using your own bank. If you would like a free quote then send me an email with an outline of your particular requirement and I look forward to hearing from you.
Tom Holian [email protected]