GBP/AUD Jumps Over 0.40% to Conclude a Positive Week

GBP/AUD is surging on Friday, finally departing from December lows. The pair is about to end the week with a decent gain after a dramatic post-election tumble. Currently, one British pound buys 1.8785 Australian dollars, up 0.44% as of 9:00 AM UTC.

So far, no relevant economic releases are planned for today, as both the UK and Australian markets just returned from celebrating the Christmas and Boxing Day. However, the sterling has gone wild as investors shifted their focus from no-deal Brexit fears to optimism around the trade deal between the US and China.

The pair has experienced one of the biggest weekly drops in years on no-deal Brexit worries, after UK Prime Minister Boris Johnson said he would make it illegal for the government to extend the withdrawal transition period beyond December 2020. The parliament had already passed Johnson’s amended Withdrawal Agreement Bill (WAB) last Friday, so the UK and the European bloc have to reach a trade deal within 11 months after the official Brexit occurs by January 31.

Nevertheless, the pound’s current bullish attempt might also be explained by technical analysis reasons. Investors might have overreacted to the no-deal Brexit fears, so the sterling is now rebounding to test regional resistance levels.

Earlier today, British think tank Resolution Foundation said that real wages are expected to surge early next year to highest levels since before the financial crisis in 2008. However, it is not clear whether the turnaround in salaries will be sustainable since the economic growth is slowing down and there are early signs of weakening employment figures. The organization said:

“The big question for 2020 is whether (the labour market) can continue its strong run, or whether it will reach a tipping point and reconnect with weaker growth performance.”

Both the pound and the Aussie are welcoming news that Beijing and Washington are getting close to signing the phase one trade deal. On Tuesday, US President Donald Trump said that he and Chinese President Xi Jinping would have a signing ceremony. The interim agreement will put an end to the 17-month trade war. 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.