The British pound is higher against the Australian dollar on Tuesday as markets globally react to the decision by the US Treasury to stop labelling China a currency manipulator. The decision came just before the much-anticipated signing of the US-China trade deal on Wednesday. The pound was helped by the decision by British Prime Minister Boris Johnson not to accept an official request for a second Scottish referendum.

GBP/AUD was higher by 18 pips (-0.09%) to 1.8823 as of 2pm GMT, however the modest gains leave the currency pair close to its 2020 lows.

The pound

After falling for the past week, Sterling was seeing a modest rebound on Tuesday after the announcement by British PM Boris Johnson that he will not allow a second Scottish referendum or  indyref2 as it is known for short. The request was from Scottish National Party leader Nicola Sturgeon in the wake of her party’s election victory in Scotland.

The request to devolve more powers to Scotland in order to allow the referendum is officially known as a ‘Section 30 Order’. Ms Sturgeon had sent the order to the Prime Minister on the basis that Brexit has materially changed the nature of the union since the last vote took place. The whole of the UK voted to leave the European Union but voters in Scotland voted to remain. Johnson vetoed this idea, saying that she and her predecessor had promised the first vote in 2014 was “once in a generation”.

The referendum is another potential source of political uncertainty for the United Kingdom. The reaction in currency markets was weak since it was already well known that Boris Johnson is not in favour of a second referendum on Scottish independence and was very likely to decline a request for one as Prime Minister.

The British currency has had a torrid few days under a barrage of commentary from central bankers talking up the prospects of a cut in UK interest rates. So much so that financial markets now show some traders expect a rate cut as soon as the next Bank of England meeting this month.

The Aussie

There was little news out of Australia to move its currency, although cooler temperatures offer some hope an end to the weeks-old bushfires is in sight.


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.