GBP/AUD: Pair Edges Up on US-China Pessimism

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GBP/AUD continues its bullish stance on Thursday, but it still hasn’t recovered from the Tuesday loss. The pair tumbled by about 0.40%. At that point, the price break the support level of an uptrend that took off on November 7.

However, the price bounced back and is trying to maintain above 1.9000.

Currently, one British pound buys 1.9011 Australian dollars, up 0.12% as of 5:42 AM UTC. The Aussie has been under pressure on increased concerns that “phase one” trade deal between the US and China might not be signed by the end of this year.

Yesterday, the US House of Representatives passed a bill that seeks to protect the rights of pro-democracy Hong Kong protesters. The House also passed a second bill to block the export of certain munitions to Hong Kong police. Both pieces of legislation were voted with a 417-1 margin, which might put President Donald Trump in a difficult situation, as he has been negotiating a trade deal with China for months.

The Senate backed both bills, so Trump should have the last word on them. So far, the White House didn’t comment on the President’s position on this legislation.

At this point, the chances are that the world’s two largest economies might not ink an interim deal this year.

Christian Whiton, a former Trump administration adviser who currently serves as a senior fellow for strategy and trade at the Center for the National Interest, commented on the situation:

“The violent crackdown against protesters in Hong Kong, which Beijing is directing, decreases the odds of a deal. Is Xi really going to be invited for a grip-and-grin with the president as his cops are beating students in Hong Kong?”


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