The pound to Australian dollar exchange rate has rallied higher today with rates for the GPB vs AUD sitting above 1.8250. There is a growing expectation that the Reserve Bank of Australia (RBA) may look to cut interest rates further at the meeting tomorrow morning. Some of the major banks including Westpac are predicting an interest rate cut which could be putting further pressure on the Australian dollar. Westpac has predicted rates for AUD/USD could hit a 10 year low as a result of further interest rate cuts. The RBA cut rates consecutively in June and July to try and add some stimulus to the economy to try and halt a slowdown down under. Unemployment in Australia recent climbed higher to 5.3% up from 4.9% the month prior which is causing alarm amongst policy makers at the central bank.
In the UK, Brexit remains the single biggest driver for sterling exchange rates. Expect a highly volatile week with the Conservative party conference in full swing despite a number of cyber-attacks making communications out of the conference difficult. Today is the second day of the conference and a speech from Chancellor Sajid Javid will be made this afternoon. Prime Minister Boris Johnson will be making his speech on Wednesday.
However with parliament now sitting after the Supreme Court ruled the proroguing of parliament to be unlawful the outlook as to whether there will be a deal or not is looking very cloudy and leaves an unclear picture for GBP to AUD exchange rates. Much of the Brexit debate focuses on a bill that was approved in parliament that requires the Prime Minister to request an extension for Brexit, something Boris Johnson strongly opposes. There have been reports that parliament will seek to introduce further legislation against the government to try and stop Boris Johnson from not committing to do this and he refuses to rule out a no deal Brexit.
It is worth mentioning that Nigel Farage announced over the weekend that he would stand for a seat in Westminster at the next general election which only highlights how tense the Brexit situation currently is.
Those with pending requirements to either buy or sell Australian dollars would be wise to consider their options with just one month to go before the Brexit deadline of 31st October. For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at [email protected]