Pound to Australian Dollar forecast: New Brexit plans to cause GBP/AUD movement
The pound to Australian dollar exchange rate has fallen lower with rates hovering around 1.78 for the GBP vs AUD pair. Yesterday saw Boris Johnson voted in as the new Prime Minister and there is likely to be volatility in the coming weeks as the markets react to his plans surrounding Brexit which remains the single biggest driver for sterling exchange rates. Boris Johnson will be appointing his cabinet in the next day or so and it is widely expected that it will comprise of leave supporters only.
This will be a very different cabinet to which the former Prime Minister Theresa May had which saw a balance of views on Brexit. A statement from the new Prime Minister is expected later this afternoon and there could be volatility on the back of it. However, with the summer parliamentary recess starting tomorrow we may need to wait until early September before the real fireworks commence in British politics. Pound to Australian dollar exchange rates are likely to be heavily impacted by all the political developments at Westminster and those with a currency transfer to make would be wise to plan around the latest news as it breaks.
US China trade war: Trade talks to resume
Reports have emerged that face to face meetings will resume between the US and China in a bid to try and break the deadlock on trade after talks broke down in May. The Australian dollar is one currency in particular that would likely benefit from a trade deal but there is a big question mark as to when this will eventually happen and the scope that the deal covers.
RBA statement this evening
This evening will see a statement form Reserve Bank of Australia (RBA) Governor Philip Lowe and is likely to reflect on the recent interest rate cuts made by the central bank. There is an expectation that the RBA may need to cut rates again in the Autumn and there could even be two interest rate cuts. With rates falling down under this is likely to put further pressure on the Australian dollar and could see rates move lower. There is currently a good opportunity to sell Australian dollars following the sharp fall and those with pending requirements looking to buy or sell Australian dollars would be wise to consider planning around any developments coming from the Central bank.
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