The pound to Australian dollar exchange rate has fallen lower from its recent peak with rates hovering around 1.86 for the GBP to AUD pair. Rates remain particularly volatile as the uncertainty in British politics over Brexit continues to be the main driver for sterling exchange rates.
This afternoon will see a series of indicative votes in the British Parliament which will be debated and then voted on this evening. These votes are to try and find a path for Brexit that would command a majority in Parliament even if that means removing power from the Prime Minister.
However, it is worth highlighting that these votes are only indicative and the Prime Minister doesn’t have to enforce the votes. Theresa May is also seeking to bring her deal back to Parliament for a third meaningful vote (MV3) but only if she is confident that it will get through the House of Commons. There are reports emerging that if the Prime Minister was to offer a date for her resignation then it could persuade other MPs to vote in favour of her deal.
How is Brexit affecting the Pound to Australian dollar rate?
The next few days are likely to be critical in shaping the future direction of GBP to AUD and any sign of a deal should be seen as positive for the pair. Some of the big name Brexit supporters such as Boris Johnson and Jacob Rees Mogg are now leaning towards voting for the Prime Minister’s deal. How things unfold will much depend on whether the Democratic Unionist Party (DUP) move to support the deal. For the time being this is looking unlikely but any move from these politicians which prop up the Government could see a major swing in the GBP vs AUD pair.
Australian dollar supported by positive Unemployment data
The Australian dollar has been supported after the strong unemployment data that saw unemployment down under fall to an 8 year low. The positive data is welcome news for the Reserve Bank of Australia (RBA) and any decision to cut rates would appear less likely. The fact that the US Federal Reserve is not looking to raise interest rates for the rest of 2019 also appears to be helping the Australian dollar.
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