Both sterling and the Australian dollar appear to be locked in battle at present as the pound to Australian dollar exchange rate continues to rise and dip just above and just below 1.80.
Conservative Party leadership TV debate: Boris Johnson reaffirms plan to leave EU by October 31st
On the sterling side of things, a no deal Brexit is still very much looking on the cards and last night during the Conservative party leadership debate in the UK, the hot favourite Boris Johnson once again retained his stance that he would indeed be planning to leave the EU on October 31st and that the days of ‘kicking the can down the road’ would be over.
A no deal Brexit has been a thorn in the pounds side for quite some time now and almost every time the chance of a no deal Brexit increases you tend to see the value of the pound drop.
For those looking to buy or sell Australian dollars, sterling has not dropped too much against the Australian dollar compared to that of other major currencies and this has been due to the Australian economy having a number of problems of its own.
Reserve Bank of Australia expected to cut interest rates: How will this influence GBP vs AUD exchange rates?
The RBA have cut interest rates at the last two interest rate meetings and a number of large financial institutions are expecting further cuts in 2019. An interest rate cut is generally seen as negative for a currency as it makes the currency less attractive to investors.
With other ‘safer haven’ economies still offering great returns such as the US and the US dollar it is no wonder that investors are leaving the Australian dollar and seeking a higher return in what can be seen as a safer environment.
Brexit and Trade Wars to drive GBP/AUD currency pair
Moving forwards, I still feel that Brexit and any heightening of trade wars will be the two main key points that will drive this pairing. Interest rate speculation will still have an impact, but I feel the dust may have settled on rates for a few months now, positive Brexit news would like bring a surge in the value of sterling but further steps towards a ‘no deal and we could find that the pound really struggles in the next two months.
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