There are now just 39 days until the UK is scheduled to leave the European Union, despite there being a number of uncertainties remaining surrounding the terms of the UK’s departure.
It is still unclear if the next ‘meaningful vote’ on Theresa May’s Brexit deal will take place on the 27th of February as previously indicated. The vote is scheduled for the 27th of February meaning that one of the key dates over the next month could be next Wednesday.
Last month when the previous meaningful vote took place Mrs May lost be a record margin and there was a steep range for GBP exchange rates. I would expect the next vote to also carry the potential for market movement, especially as a loss for Theresa May. If she loses the next step would likely be either an extension to Article 50 which would allow more time for negotiations. Failing this then the chances of the UK leaving with no deal would increase and I’m expecting to see Sterling lose value if this path becomes a reality.
AUD rates led by US-China trade talks and the housing market
UK politics remains the key driver of GBP exchange rates at the moment, whereas in Australia the trade talks between the US-China are impacting AUD value along with concerns surrounding the Australian housing market. House prices have been declining and the Reserve Bank of Australia has been cautious regarding making amendments to the interest rates in case of further impacts.
GBP to AUD forecast
The GBP/AUD rate remains close to the upper levels seen over the past two and a half years, and those of our readers who plan to make currency exchanges involving this pair should consider this, especially due to the uncertainty surrounding the UK at the moment. If a deal is struck between the UK and the EU, I would expect to see Sterling climb. Sterling’s gains could be restricted though, as likewise a deal between the US and China would likely provide AUD with a boost.
If you would like to be updated in the event of a spike in the GBP/AUD rate, do feel free to send me a message using the form below. UK Economic data releases are light this week, so I expect politics to remain to key driver.