We’re seeing a historic week for Sterling rates across the board as the currency has declined to fresh post-brexit-vote lows against numerous major currency pairs this week, with many of those lows being being 3-5 year low points for the Pound value, and in GBP/USD’s (cables) case, over a 31 year low.
The catalyst for this sell off has been the UK Prime Minister, Theresa May’s words over the weekend at the conservative conference, where she announced that Article 50 will be invoked in March of 2017. Whilst not coming as a shock to currency markets as Boris Johnson previously implied that this would be the case, May confirming these suggestions has put added pressure on the Pound as many were hoping for a ‘Soft Brexit’ whereby prolonged negotiations, and delaying Article 50 would allow the UK to continue having access to the EU’s single market, although it’s not looking like that’s going to be the case.
Sentiment is likely to continue driving this particular pair but a further interest rate cut from either the BoE or the RBA will likely weaken the underlying countries currency.
Tomorrow there will be NIESR GDP figures released out of the UK which could create movement within exchange rates, particularly downward for the Pound if the figure is released below its expectation of 0.3%.
If you have an upcoming currency requirement which involves exchanging Pounds for another currency such as the AUD, it may be an idea to remove the risk of further falls if you’re working to a budget or timescale, as many analysts are expecting further falls for the Pound.