GBP/AUD Exchange Rate Steady as Brexit in Focus
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning, as Brexit remains firmly in focus for investors.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.8271, up around 0.3% from this morning’s opening rate.
Pound (GBP) in the Balance as Johnson Given Just Days to Salvage Brexit Deal
The Pound (GBP) look set to be met by fresh volatility this week as Brexit negotiations between the UK and EU intensify.
This comes as French President Emmanuel Macron told Boris Johnson in a phone call over the weekend that the EU would make a decision on a Brexit deal by the ‘end of the week’.
Macron reportedly told Johnson:
‘The negotiations should continue swiftly with Michel Barnier’s team in coming days, in order to evaluate at the end of the week whether a deal is possible that respects European Union principles.’
Analysts suggest the chances of the two sides reaching a deal by the end of the week are slim to none, something which is likely to keep a lid on Sterling in the coming days.
The real question appears to be whether Johnson’s will obey a law compelling him to seek a Brexit extension if a deal is not reached by 19 October, with the Pound likely to face some headwinds if it looks like he may try and circumvent the law.
Australian Dollar (AUD) to Slump if US-China Trade Talks Fail to Inspire Hope?
In the absence of any notable economic data, the main catalyst of movement in the Australian Dollar (AUD) this week looks set to be the high level US-China trade talks taking place in Washington later in the week.
Previously analysts had speculated on the possibility of some sort of interim deal being agreed by the two powers, aimed at preventing the introduction of additional tariffs.
However Bloomberg suggest that the talks may prove less productive than markets hope.
Citing sources close to China’s Vice Premier Liu He, who will lead the Chinese contingent in this week’s talks, suggest that Beijing will not make any commitments on reforming industrial policy or government subsidies.
As two of the Trump administration’s major grievances again China, the refusal to budge on these issues could leave limited scope for progress, likely limiting the appeal of risk-sensitive currencies such as the Australian Dollar.
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