Many of my clients with a requirement for converting pound to Australian dollars are asking the same question. What’s next for Brexit and how will this impact my currency transfer? Today was the day when the UK was supposed to leave the EU and begin the transition period, but instead, members of Parliament will be voting on a stripped down version of Theresa May’s deal.
Most media stations within the UK are suggesting that MPs will vote against Theresa May once more, and this is being reflected in pound to Australian dollar exchange rates. Over the last 48 hours the GBPAUD interbank exchnage rate has dropped by 3 cents. To put this into monetary value a £200,000 transfer into Australian dollars now generates clients AUD $6,000 less compared to the higher point of trading on Wednesday.
As the EU are fully aware that it’s unlikely that this vote will be passed, European officials are preparing to offer a long extension to the UK. MPs will then have to ask themselves the question next week, do they accept the long extension or crash out of the EU with no deal? As MPs have already voted in favour of not crashing out of the EU, we could see the option of a long extension being voted in, this would be confirmed at the special summit on the 10th April. A long extention could be seen as a good and bad for the pound. On one hand its clear that the UK and EU want to find a way of securing a deal that works for both parties, but on the other hand UK businesses are crying out for certainty and a year extension does the complete opposite.
Next week the spotlight is also on the Reserve Bank of Australia (RBA) as they are set to release their latest interest rate decision on Tuesday. The RBA has hinted towards cutting interest rates in a bid to stimulate growth downunder. However as the unemployment rate fell this month, this could have decreased the likelihood of a cut occuring this month. However any further hints as to when they plan to cut rates could put pressure on the Australian dollar, making it cheaper to buy. The the events in the UK could also overshadow this data release.
To discuss the factors that could impact your currency exchange involving AUD, use the form below to get in touch. I’ll be happy to respond personally.