Sterling exchange rates have got off to a poor start this week with the pound to Aussie dollar exchange rate trading down by 0.2% at the time of writing, and trading at 1.6250 on the interbank rate which is the day’s low.
Pound to Australian Dollar exchange rate: Boris clashes with the EU on Brexit
The currency has dropped from Friday’s trading session against all major currency pairs so far, and this is most likely down to the reports released over the weekend suggested that Boris Johnson’s new government is on a collision course with Brussels as EU leaders are unwilling to re-negotiate the Irish backstop or amend the EU Withdrawal Agreement which has already failed to pass through Westminster on three attempts.
The new UK government is apparently planning on ramping up No-deal Brexit plans as the likelihood of a no deal Brexit increases, and this is taking place as the UK Parliament is on summer recess and not expected to return until the 3rd of September.
UK Data this week: Bank of England interest rate decision on Wednesday
Economic data due out today is light so UK politics is likely to remain the main driver of currency value for the pound today. Throughout the week the key economic updates could come from the Federal Reserve Bank in the US on Wednesday, and from the Bank of England on Thursday as both central banks are due to release statements and announce their most recent interest rate decisions.
Markets are expecting to see a rate cut from the US Fed and if the cut is by a greater margin than expected this could benefit the Australian dollar as the gap between the US and Australia’s interest rate offerings will become smaller.
Perhaps the busiest day for economic updates out of Australia this week will come on Wednesday when Inflation Data will be released at 2.30am UK time. Expectations are for 0.5% on a quarterly basis, so expect any deviations from this figure so potentially result in market movement.
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