The British pound has declined against the Australian dollar since the beginning of the trading session on Friday, but it continues to move within a horizontal channel that started on October 17. The corridor’s resistance level is at around 1.8939, while the support line is at 1.8750.
GBP/AUD has dropped 0.14% so far, but the quotation is in free fall right now. Currently, the pair is trading 1.8811 as of 05:40 AM UTC. The pound is under pressure after UK Prime Minister Boris Johnson called for an election on December 12.
PM Johnson Sets Election Date
The British currency started to lose strength after PM Boris Johnson announced that he was asking the UK parliament to endorse a national election on December 12, a move to ensure the country leaves the bloc. He stated:
“The way to get Brexit done is, I think, to be reasonable to parliament. If they genuinely want more time to study this excellent deal, they can have it, but they have to agree to a general election on December 12. That’s the way forward.”
Jeremy Corbyn, leader of the Labour Party, which is in opposition, said he would wait to know the EU’s decision on a Brexit deadline extension before deciding which way to vote on Monday, reiterating that he would support an election only if no-deal Brexit is totally avoided.
Given that other opposition parties don’t seem to back the election proposal, it is now quite unlikely that the PM’s effort to dodge the parliament through the popular vote will be successful.
For Johnson, an election might be the only solution to handle Brexit after parliament initially voted in favor of his deal on Tuesday but then refused to support his timetable that would meet his deadline next Thursday.
Nevertheless, he couldn’t obtain parliament’s support for an election on two occasions. The PM told Corbyn in a letter:
“This parliament has refused to take decisions. It cannot refuse to let the voters replace it with a new parliament that can make decisions.”
On the other side, EU ambassadors are now meeting in Brussels to decide the extension and its length.