Pound to AUD forecast: Theresa May’s Brexit plan comes under heavy criticism

PM May’s position in doubt

The key driver for the Pound to AUD rate yesterday was of course Brexit. Theresa May’s plan, which has been agreed in principal by Cabinet members has come under heavy criticism and has resulted in the resignation of UK Brexit Secretary, Dominic Raab. This was a major blow to Theresa May and her chosen replacement, Environmental Secretary, Michael Gove has rubbed salt in the wound by turning down the role. Gove stated if he were to take the position he would be looking for an improved deal which goes against Theresa May’s proposed deal and puts him in an awkward situation which means we could have another potential high profile resignation to bring the total to eight.

If this was not bad enough for the Prime Minister, Jacob Rees-Mogg has called for a vote of no confidence in Theresa May. For a leadership challenge to occur there must be a total of forty eight letters sent to the 1922 committee. There would then have to be a majority vote of 159 MPs for the leadership challenge to take place. If then a new candidate could not win a majority victory we would then be forced to hold a general election.

Personally I feel many of these MPs have their own agenda opposed to genuine concern for the UK. Theresa May’s stance remains firm which seems admirable in the face of such adversity.

Impressive employment data from down under boosts AUD

Yesterday saw high levels of volatility on the exchange with some of the biggest falls for Sterling in over a year. The Australian Dollar also benefitted from some impressive employment data. Figures came in above expectations, full time employment saw an additional 42,400 jobs created in October which was far superior to September, at 20,300. Unemployment was also steady at 5%, proving to be another catalyst for the Australian Dollar.

The level of political and economic uncertainty due to Brexit is a huge concern for investors and is weighing heavily on Sterling. There is the potential for further falls for the Pound. If you have a currency requirement involving the Pound it is more important than ever to be in touch with a broker to assist with an individual strategy in an attempt to maximise your return.

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