Brexit news: Progress leads to rise in pound to Australian dollar rate

Coronavirus and China Developments Top Priority for Aussie

The Pound to Australian dollar exchange rate has hit 1.81 during the last week as it appears as though the Brexit issue is getting nearer to a conclusion.

Will a Brexit deal be agreed in November?

Last week UK Brexit Secretary Dominic Raab suggested that a Brexit deal could be agreed as early as November 21st, although Downing Street has vehemently denied the claims as speculative.

However, I think there is no smoke without fire and I think as each day goes by the UK are getting closer to having a Brexit deal in place. At the moment the key issue is that of the Irish border, which has still not been sorted out.

As far as the UK and Theresa May are concerned there will be no way that a deal can be done with a hard border, as this would divide Northern Ireland from the Ireland mainland, and owing to what has happened politically in the past Theresa May will not allow this to happen.

Australian interest rates

On Tuesday the Reserve Bank of Australia once again kept interest rates on hold at 1.5% and with the US Federal Reserve potentially looking to increase interest once more before the end of this year the disparity between interest rates in Australia and the US is the biggest it has been in the history of the Australian Dollar.

This is causing investors to move money away from the Australian dollar in favour of the US dollar and this is one of the reasons why the pound to Australian dollar exchange rate has risen in recent months.

Overall, the Brexit issue will be the over-riding factor for GBP/AUD exchange rates and with the tone very positive at the moment I think if the Brexit talks continue to progress this month we could see further gains for the Pound vs the Australian dollar.

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