GBP/AUD Exchange Rate Lifted by Brexit Delay Warning
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is steadying this morning as markets react to the news that Theresa May will face a vote of no-confidence later this evening.
At the time of writing the GBP/AUD exchange rate has risen roughly 0.4% so far this morning, after slumping roughly a cent overnight.
Pound (GBP) Exchange Rates Climb as May Warns Defeat Will Delay Brexit
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate is edging higher this morning after it was confirmed that Theresa May will face a vote of no-confidence from her colleagues.
Sterling sentiment initially fell overnight on Tuesday after reports first emerged that rebel Conservatives had amassed enough letters to force a vote of no-confidence against May.
However GBP exchange rates rallied shortly after it was confirmed that the vote would go ahead as Theresa May struck a defiant tone outside Downing Street telling reporters that she will ‘contest that vote with everything I have got.’
However it’s likely to be May’s warning on Brexit that spurred the Pound higher this morning as she warned that ousting her as PM would result in Article 50 being pushed back, ‘delaying or even stopping Brexit’.
Conversely many observers suggest it is unlikely that Theresa May will lose today’s vote, with analysts at JP Morgan suggesting roughly 200 of the 315 Tory MPs will back the PM due to the poor timing of the vote, protecting May from another vote for at least 12 months.
Australian Dollar (AUD) Exchange Rates Slips Despite Easing Trade Tensions
At the same time the Australian Dollar’s (AUD) retreat against the Pound (GBP) this morning comes despite the ‘Aussie’ strengthening overnight amid easing tensions between the US and China.
This is partly due to Beijing’s move to cut tariffs on US cars, but also due to President Trump’s suggestion that he may intervene in the US fraud case against Huawei’s CFO, Meng Wanzhou, if it will help to resolve the trade dispute between the two powers.
Speaking to Reuters Trump said:
‘If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary.’
GBP/AUD Exchange Rate Forecast: Sterling to Collapse If May Loses Vote?
Looking ahead, while Sterling may currently be buoyed by suggestions that a defeat for May this evening could delay Brexit, analysts warn the reality of May being ousted as PM would likely lead to a sharp drop in the Pound Australian Dollar (GBP/AUD) exchange rate.
Whatever the outcome we can expect some notable volatility in GBP exchange rates in the coming days as Brexit remains squarely in focus.
Meanwhile movement in the ‘Aussie’ through the latter half of the week is likely to be determined by the Reserve Bank of Australia’s (RBA) latest bulletin, with AUD exchange rates potentially weakening if the bank raises concerns over the recent slowdown in global growth and the impact on the domestic economy.