At the end of this week Australians will be going to the polls to vote in the Australian Federal election. Over the last twelve years Australia has had a total of six different prime ministers which has caused a problem for the Australian economy in terms of continuity.

Currency Pair% Change (Month)Difference on £200,000
GBPAUD3.1%AUD $10,140

According to the latest set of polls the Labor Party led by Bill Shorten appear to be the front runner but as we have seen in recent years polls can often be misleading. The other party, the Liberal-National coalition, is led by current Prime Minister Scott Morrison. Both parties are clashing on taxes, public spending and climate change which appears to be a huge concern for many votes down under.

Morrison is the the third leader in just four years and he has only been in power since August 2018 so another change in leadership could cause a problem for the Australian dollar. If you’re in the process of buying or selling Australian dollars then make sure you’re well prepared for what could happen over the weekend to GBP/AUD exchange rates.

If Morrison does retain his position then this could potentially provide the Australian dollar with a boost against the pound as he will have to serve a full term, which in theory should help stabilise the economy and therefore the Australian dollar.

What happens next?

Australian economic data

Prior to the election Australia will announce their latest set of unemployment data for April. The expectation is for 5.1% which has been rising slightly recently so another sign of a slowdown could cause the Australian dollar to weaken.

As we end the week on Friday Australian will reveal the most up to date Consumer Inflation Expectations for May so if inflation looks as though it is falling combined with a slow down in unemployment this could put pressure on the Reserve Bank of Australia to cut rates at their next meeting. Therefore, if you’re considering buying Australian dollars then it may be worth getting this organised early this week.

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