Despite the weaker footing that Sterling is currently on the Pound has managed to make some small gains against the Australian Dollar. The change of Prime Minster down under has created some uncertainty for Australian Dollar exchange rates. After Malcom Turnbull was ousted and replaced by the new Prime Minister Scott Morrison there have been some political concerns for the Australian Dollar.
Fresh elections in Australia will be held next year and will become a focal point for the Australian Dollar ahead of May 2019. For the time being these losses for the Dollar are unlikely to be too severe – The nature of Australian politics is that there is a relatively high turnover of Australian Prime Ministers. This new Prime Minister Scott Morrison is in fact the fourth over the last 10 years highlighting that a change of leader is par for the course. His approach will now be to try and reunite his party ahead of those crucial elections next year.
The ongoing Brexit uncertainty is driving the Pound lower with falls seen against most of the major currencies. This trend is likely to resume once the political situation down under settles and rates for GBP AUD may have further to fall. The British Parliament returns 4th September after the summer recess and politics are likely to be play a major part in the direction of the price of Sterling.
Talk has been revolving around a potential no deal scenario which is keeping the Pound under pressure. Any signs of a breakthrough could see the Pound rally. The risk is that it could still be a number of months rather than weeks before we even get close to striking a deal, leaving a sustained period of uncertainly for the Pound.
For assistance in timing your exchange when either buying or selling Australian Dollars, please get in touch with me James at [email protected] and I will be happy to assist.