GBP/AUD inched up 0.02%, to 1.8764 as of 5:30 AM UTC. The pair is taking some rest after surging more than 1% since last Thursday. The biggest gain came yesterday, when the price finally broke the resistance line of a long-lasting bearish channel, as we previously anticipated.
The Australian dollar started to weaken on Friday after US President Donald Trump said he wouldn’t roll back tariffs on Chinese good, though he awaited a trade deal with Xi Jinping.
Yesterday, the UK economy narrowly avoided a recession in the third quarter, adding 0.3%. However, the Bank of England and analysts still expected a higher reading.
The British pound is currently driven by the latest Brexit developments as well.
Farage Will Not Contest Conservative Party’s Seats
Earlier today, Brexit Party leader Nigel Farage said he and his party wouldn’t contest any seats currently held by the ruling Conservative Party at the national election scheduled for December 12. Thus, Farage won’t field any candidates in seats now held by Prime Minister Boris Johnson’s party.
The move comes after prolonged fears from Brexit supporters, who were concerned about the possibility of putting up candidates in every seat, which could divide the pro-Brexit vote and consolidate the opposition.
Farage’s decision boosts the chances of Conservatives to obtain a majority at the general election and eventually implement the Brexit agreement secured in October with European leaders. Farage said at a party meeting in Hartlepool, northeast of England:
“We now have a Leave alliance, albeit we’ve done it unilaterally. This prevents a second referendum from happening and that to me today is the single most important thing in our country.”
He added that the Brexit Party would focus entirely on seat currently held by the Labour party and other, smaller fractions. Farage argues that by winning the seats, his party would help “keep Boris Johnson to his promises” in the UK Parliament.
Elsewhere, Boris Johnson welcomed Farage’s decision, saying that a hung parliament was the main threat to Brexit. The PM stated:
“I’m glad that there is a recognition that there is only one way to get Brexit done and that is to vote for the Conservatives.”