- Sudden influx of worrying ‘Brexit’ predictions limit investor activity in the Pound
- PM warns of potential conflicts within EU if UK votes to leave
- Australian Dollar slumps overall as election announcement arrives
- UK trade balance results due out tomorrow
The Pound Sterling has been an unsafe prospect for investors recently, having been generally weakened by a slew of recent UK Referendum outcome warnings.
The Australian Dollar has also been unsettled by voting developments, with the general elections now officially being announced.
UK Economic News: GBP Investor Fears over ‘Brexit’ Impact Rise after PM Warns of Security Threats
The Pound’s movements against its peers today have been divided overall, with gains including 0.3% against Australian Dollar (GBP/AUD) and the Canadian Dollar (GBP/AUD) and 0.8% against the Hungarian Forint (GBP/HUF) being matched with losses of -0.3% against the Swiss Franc (GBP/CHF), -0.5% against the Israeli New Shekel (GBP/ILS) and -1% against the Russian Ruble (GBP/RUB).
The Pound’s unsettled condition is likely to be a symptom of the continual ramping up of the stakes of a potential split from the European Union; the most recent estimates have concerned both the future stability of the UK, as well as the European Union itself.
One such forecast has come from the Prime Minister, who has cited the Napoleonic Wars and First and Second World Wars among examples of times when the UK had to directly involve itself in European security and stability, without which dominant powers could have seized control of the continent and threatened the UK itself.
While not explicitly stating that inter-EU wars might occur, Cameron nonetheless warned that leaving the EU would put both the separated UK and the deprived EU at risk of security threats from within and without, saying:
‘if things go wrong in Europe, let’s not pretend we can be immune from the consequences’.
Elsewhere, it was hinted in a poll by Ipsos Mori that a ‘Brexit’ outcome could lead to many other EU nations deciding to hold their own referendums on membership with the EU.
Australian Dollar (AUD) Slides as 2016 General Election Officially Starts
The ‘Aussie’ has been a poor prospect overall recently, with losses including more than -0.2% against the Euro (AUD/EUR), US Dollar (AUD/USD) and Pound Sterling (AUD/GBP). An advance of note has been by 0.3% against the New Zealand Dollar (AUD/NZD).
The most recent development, outside of low-impact domestic data, has been from PM Malcolm Turnbull, who has announced a ‘double-dissolution’ general election for July 2nd.
The election marks the first real test of Turnbull’s fledgling parliament, which was formed after he forced out previous PM Tony Abbott in a leadership challenge last year. The PM has apparently called the election for the purpose of replacing objectionable senate officials with more supportive party members, something that calls the supposed gravity of the election process into question.
In terms of domestic data, job advertisements have dived in April, which paints a bleak picture for a jobs market that should be expanding, given that there is now a focus on replacing mining as the dominant Australian industry.
Future GBP, AUD Forecast: UK Trade Stats due Tomorrow along with BRC Sales
The next data to affect the pairing is set to come from the UK, in the form of the April BRC like-for-like sales and trade balance outcomes for March, both of which are due in the morning.
In the former case, a rise from -0.7% to 0.5% has been forecast, while in the latter an overall reduction in the deficit is on the cards.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9630 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5096 today.
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