GBP to AUD forecast: Further positive signs for the Pound vs Australian dollar

Pound to Australian Dollar forecast GBPAUD rates fall to 1.80 as Brexit protesters take to the streets in their thousands

It’s been a fantastic 4 weeks for the pound vs Australian dollar. GBP to AUD exchange rates have increased from 1.7880 to 1.8630 at the time of writing this article. To put this into monetary value, clients that are emigrating to Australia are now generating an additional $30,000 Australian dollars on a £400,000 transfer.

The improvement has come following Theresa May’s change in stance in regards to Brexit. For the last 2 years the PM has stated ‘no deal is better than a bad deal’ and the UK would leave the EU at the end of March, however the PM has now confirmed that she will allow MPs to vote on whether to extend Article 50 if they don’t back her deal next month when they have the meaningful vote.

Looking further ahead, it looks like an extension of Article 50 or a Brexit deal is on the horizon and that’s the reason why the pound has made considerable gains against all major currencies and in particular the Australian dollar.

Leader of the ERG Jacob Rees Moog has been one of Theresa May’s leading critics and only a few months ago he filed a motion of no confidence against the PM. Recent reports are now suggesting he could back the PMs deal as this is the only way to guarantee the UK leave the EU at the end of next month.

Another topical news story which gave the pound a boost yesterday was the news that Norway’s €1 trillion sovereign wealth fund, which is the largest in the world, confirmed that they will be upping their investment in the UK. In my opinion the wealth fund must feel that the UK won’t crash out of the EU without a deal, which is another reason why I expect an extension or a deal for the UK is on the horizon.

Slowing Chinese growth puts pressure on the Australian dollar

Down under Australia’s problems continue. Growth in China is slowing which is putting pressure on Australian exports. Furthermore house prices are falling for many reasons and the likelihood is that the central bank will cut interest rates in a bid to stimulate the market.

All in all, its not looking like a great year for the Australian dollar and with a change of tide in the Brexit negotiations clients selling Australian dollars to buy pounds should seriously consider their position in an extremely volatile market.

For more information on GBP/AUD rates or anything you have read in my GBP to AUD forecast please feel free to send me a message. You can ask me any questions directly using the form below and I will respond to you personally.