GBP/AUD: Pound Drops on Fresh No-Deal Brexit Fears

GBP/AUD is declining in early trading on Tuesday on renewed political tensions in the UK. The pair is currently trading at 1.9320 as of 6:00 AM UTC.

The sterling turned bearish after the UK released PMI data. However, the British currency is now under pressure after the UK government, led by Prime Minister Boris Johnson, said it was about to add a new clause to the Withdrawal Agreement Bill (WAB) to make it illegal for Parliament to extend the deadline of the transition period. According to some politicians and analysts, this opens the door to a no-deal Brexit, which scares markets.

Brexit is likely to happen before January 31 of next year, but the transition period is due to complete on December 31, 2020. Nevertheless, the UK can agree with European leaders to extend the deadline, but Johnson insists for an 11-month transition. He will put the amended WAB to vote this week to make any extension illegal.

Many senior European figures, such as the EU chief negotiator Michel Barnier, are not sure that a deal might be agreed by the end of next year.

The Aussie would have gained more against the pound, but the Reserve Bank of Australia (RBA) was dovish at the end of the year. In its latest meeting minutes, the central bank said that it was open to more rate cuts, though it would reassess the economic outlook at its first meeting in 2020. Currently, the RBA monitors the effect of the latest three rate cuts. The bank said:

The available evidence suggested that more stimulatory monetary policy had been working through the usual channels. Economic growth and the unemployment rate remained broadly consistent with the forecasts, but members agreed that it would be concerning if there were a deterioration in the outlook.”

The RBA hinted to more rate cuts to support hiring and investments. The central bank is seeking to revive an economy that started to slow last year. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.