GBP/AUD Takes a Break from Dramatic Decline

GBP/AUD is trading sideways, taking a pause from its steep decline. Currently, the pair is trading at 1.8700, up 0.01% as of 6:29 AM UTC. At the moment, the quotation seems to be undecided about where it will close the session. It touched a daily low at 1.8647 earlier today, which is the lowest level since November 11. It bounced back and is now trying to recover some of the Monday losses, when the price tumbled 0.87%, though it might revisit the daily low.

There are no major fundamentals to move the price right now, as the markets are closed on Christmas Day.

Nevertheless, the pricing revolves around two key factors that have been decisive for the pair in the last few days: the debate over the Brexit transition timeline and the US-China trade deal. Both factors are unfavorable for the sterling at the moment.

In the UK, Prime Minister Boris Johnson amended the Withdrawal Agreement Bill (WAB) to make it unlawful for the government to extend the transition deadline beyond December 2020. While Johnson has managed to keep his Brexit promises so far, investors fear that he might fail to reach a trade deal with the European Union within such a short period of only 11 months. A no-deal Brexit is the last thing economists are looking forward to. European leaders expressed the same feelings.

European Commission President Ursula von der Leyen warned that the UK would suffer the most if the two sides cannot meet the December 2020 deadline. She stressed that “the timetable ahead of us is extremely challenging.”

“That will clearly harm our interests but it will clearly impact more the UK,” the European official stated.

Elsewhere, the Aussie is also supported by easing tensions between the US and China. The world’s two biggest economies are about to sign the phase one trade deal, which has been already agreed between Washington and Beijing. Yesterday, US President Donald Trump said that he and Chinese President would have a signing ceremony. He told reporters:

“We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now.”

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com 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 currencylive.com do not represent our views.