Sterling sell off by British companies causing movement for GBP/AUD exchange rates
The pound to Australian dollar exchange rate has been declining since the start of May, with sterling losing value against all major currencies. Last week the Bank of England confirmed that British companies are close to a near record in regards to sterling deposits switched into Foreign Currency for the month of June. The Bank of England’s commentary and the data that supports it shows that businesses within the UK that have exposure to foreign currency are buying upfront due to threat of a no deal Brexit and could be the reason why the pound is continuing to lose value.
Could there be a UK General Election on the horizon?
UK Prime Minister Boris Johnson is back in the spotlight today as it appears that he is preparing for a General Election. Reports from the Times this morning is suggesting that the NHS will be the centre of the PM campaign and Boris is set to inject £1.8billion to boost the health service. The news comes after Dominic Grieve and Dominic Cummings disagreement in regards to whether the Government can call a vote of no confidence and stop Boris Johnson from crashing the UK out of the EU without a deal.
Brexit sagas effect on pound to Australian Dollar rates
The ongoing Brexit saga is going to be the key driver for the pound against the Australian dollar in the weeks and months to come. Since the start of May mid market exchange rates have continued to fall. If it’s the case Pro EU MP’s fail to stop Boris from crashing out of the EU, then the pound could see further decline. This was supported by the Bank of England last week, as Governor of the Bank of England Mark Carney warned that the pound could crash on the back of a no deal, and consequently also cut growth forecasts.
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