GBP/AUD Faces Resistance Amid UK’s Political Shock

GBP/AUD continues the ascending trend on Friday, though the resistance is much stronger. The uptrend was preceded by a symmetrical triangle that consumed on Wednesday. Currently, the pair is trading at 1.9425, up 0.07%.

The markets are discussing the latest news related to the coronavirus outbreak and the shock caused by the UK finance minister’s departure.

AUD down as coronavirus death toll increases

The AUD has been under pressure at the end of the week after China implemented a new method to diagnose the coronavirus presence, which caused a surge in the daily number of new cases by nine times. The number of deaths halved on Friday, with China reporting 121 deaths. The total death toll reached 1,380.

GBP still strong despite Chancellor Javid’s resignation

The sterling stays strong despite the internal political conflict that resulted in the departure of the UK Chancellor of the Exchequer Sajid Javid. He quit his position in a dramatic move after a row with Prime Minister Boris Johnson. This might have repercussions on the way the UK handles the negotiations with the European Union as part of the Brexit transition period that ends in December this year.

The new chancellor is Rishi Sunak, who was Javid’s deputy. The sudden change in staff might have a negative impact on Britain’s preparations to fully separate from the bloc, with the transition timeline being very tight already.

Javid’s resignation comes a few weeks before the UK’s budget, which was planned to demonstrate Johnson’s vision for independent Britain. The PM’s office hasn’t confirmed if the budget will go as initially scheduled for March 11.

The finance minister quit his role after a face-to-face debate with the PM in his 10 Downing Street office. Johnson asked Javid to fire all five of his top aides and establish a new economic unit that would merge with the PM’s office. The chancellor didn’t want to take that step and resigned, causing additional troubles for Johnson and his reshuffle plans.

Javid told the BBC:

“I don’t believe any self-respecting minister would accept such conditions and so therefore I felt the best thing to do was to go. The conditions that were attached were a requirement to replace all my political advisers. These are people who had worked incredibly hard on behalf of not just the government but the whole country.”

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