The Australian General Election did very little to impact GBPAUD exchange rates. Most of the focus has been on the UKs new Prime Minister Theresa May.
Following Brexit the pound has dropped considerably against the Australian Dollar. Theresa May is due to take over as the United Kingdom’s new Prime Minister later today. This has caused a much needed Sterling spike against the Aussie with GBP/AUD breaching 1.75. In Australia Malcolm Turnbull has been elected for his second term by the skin-of-his teeth. Normally the appointment of a Prime Minister would have a positive impact on the county in questions currency, however on this occasion this was outweighed by the UK PM’s appointment.
The Reserve Bank of Australia (RBA) have indicated the possibility of a rate cut. They have held off of late, which can be probably be put down to a lack of a firm government being in place. This is no longer the case. The high price of the Aussie is causing the raw materials which Australia heavily rely upon as an export to become far less appealing. I think there is a chance of a cut in coming months and if this does take place expect AUD weakness.
If you are an AUD seller you are currently in a very advantageous position. The last time we saw these levels of exchange was November 2013. Thursday will bring the UK interest rate decision and if there is a cut to 0.25% you will be presented with an incredible selling opportunity. If you would like to take advantage of this situation if it occurs be sure to get in touch with your broker so they can talk you through the process. It is important to be prepared of you have to move quickly in the market.
Call us today if you have a requirement for Australian Dollars or need to convert back to Sterling, our trading floor number is 01494 725 353.
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