GBP/AUD: Traders Keep an Eye on Brexit, Bushfires

GBP/AUD continues to trade sideways since yesterday, though it maintains the bullish mood that had lasted for several days. Currently, the pair is trading at 1.9110, up 0.03% as of 6:25 AM UTC.

Traders are closely watching the Brexit developments and the bushfires in Australia.

UK Prime Minister Boris Johnson is about to meet with European Commission (EC) President Ursula von der Leyen in London later today. He will tell her that the UK would not extend the transition period beyond December 2020. An amendment in this regard was introduced in the updated Withdrawal Agreement Bill (WAB).

Johnson won a surprising majority in the national election last month by pledging to “get Brexit done” on January 31. While the UK is set to leave the European bloc within weeks, the next task is to reach an agreement with the EU within 11-month. This tight timeline is not welcomed by European leaders and the opposition in Britain.

Nevertheless, the PM doesn’t want to step back. Johnson’s office recently released a statement ahead of EC chief’s visit, which said that the PM would “stress the importance of agreeing a confident and positive future relationship by the end of December 2020.”

“The prime minister will likely underline that the upcoming negotiations will be based on an ambitious FTA (Free-Trade Agreement), not on alignment,” the statement added.

Von der Leyen has previously criticized Johnson for trying to conclude such a complex deal within a short time.

UK Brexit minister Stephen Barclay and European Brexit negotiator Michel Barnier will also be present at the meeting.

Elsewhere, the Aussie is under pressure amid ongoing wildfires in Australia. Moody’s Analytics said that the economic damage from the bushfires is about to exceed the record $4.4 billion registered during the Black Saturday fires in 2009.

The rating agency concluded that the fires would affect consumer confidence and harm industries like farming and tourism.

So far, the fires have affected about 8.4 million hectares across the country, compared with the 450,000 hectares hit by Black Saturday. 25 people have died in the current fires.

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