The pound to Australian dollar is currently trading at 1.8915, down from the highs of 1.9146 seen on Friday of last week. This is in part a response to some fresh polls showing the Conservatives lead in the UK election narrowing, plus the RBA (Reserve Bank of Australia) keeping interest rates on hold overnight.
The Trade Wars are also an important consideration here, with Donald Trump due in the UK and markets eager to understand how these events may play out. Trump could play a role in shaping movement on GBP/AUD levels this week, in terms of potential influence on the UK election, and headlines surrounding the Trade Wars.
This week’s NATO meeting sees Trump in the UK where Boris Johnson is reportedly nervous and trying to avoid too many public appearances together. Trump is also in the headlines because of an escalation in the Trade Wars, with tariffs on Steel being raised on Argentina.
Further concern in the markets stem from the US proposing tariffs on a range of French items, including Champagne and handbags, following concerns that the French will soon implement a new digital tax for companies like Google and Apple.
The comments from the RBA have probably had the most impact, as the currency market has been loosely preparing for the prospect of an interest rate cut. Pound to Australian dollar exchange rates will continue to face scrutiny with Trump in the UK, and ongoing concerns relating to the outlook ahead for the UK following the election.
This Friday sees a further TV debate between Corbyn and Johnson, sterling to Australian rates may see increased volatility following this. With just 9 days to the election, there is still plenty to trigger market volatility ahead, for more information on the latest news and how we can help assist you, feel free to contact myself, Jonathan Watson, using the form below.