Pound to Australian dollar exchange rates have risen to near 5-month highs, the best time to buy Australian dollar with pounds since May of this year. Whilst the pound to Aussie rate has been over 1.90 on the interbank rate, current levels of 1.89 are very close.
This is in response to the optimism of the pound benefiting from an extension on the Brexit process. Whilst Boris is keenly trying to get his Withdrawal Bill passed, he is facing challenge from the British parliament who voted in the Benn Act and Letwin amendment, which triggered Boris writing a letter requesting the extension.
PM Boris Johnson to bring Brexit deal back to Parliament this week
Further ahead, the pound might encounter more interest as investors digest the outlook for the Brexit. Signs of no-deal appearing more likely indicate a weaker pound, judging by past performance, whilst signs of a deal being reached or an extension, have given rise to a stronger pound.
For the coming week, the second reading of the Boris Johnson bill in parliament may attract attention for GBP/AUD levels, as the markets digest what the outlook on Brexit will be.
Interest rate decisions and trade wars influencing Australian Dollar
On the Australian dollar side, investors will need to contend with the outlook for the Trade Wars and Australian interest rates. With Chinese economic growth having slowed to a near 30-year low, there has been mounting concern that the Trade Wars are weighing on the global economy and could see the RBA (Reserve Bank of Australia) keener to cut interest rates.
The raising and lowering of interest rates can influence the strength of a currency, with often a lower rate making a currency weaker.
If you need to consider a GBP/AUD currency exchange in the future, we could be looking at increased concerns ahead for both Brexit and also the Trade Wars which may trigger volatility on this pairing. Thank you for reading and please do get in touch to highlight any possible trade you may wish to consider for the future.