- Boris Johnson to travel to Brussels in June
- China parliament approves Hong Kong security law
- RBA’s Lowe says economic package is working
- BOE’s Saunders prefers ‘easing too much and tightening later’
GBP/AUD was up by 12 pips (+0.07%) to 1.8514 as of 4pm GMT.
Pound to Australian dollar stumbled around with minimal progress in either direction on Thursday. Yesterday the exchange rate fell -0.19%, bringing a weekly tally of -0.63%.
GBP: Boris Johnson to travel to EU in June
Sterling has been fluttering near multi-month lows against several currencies, unable to capitalise on an improved market mood. Across broader markets risk sentiment hangs on 3000 level in the S&P 500.
Expectations are pretty low for next week’s trade negotiations between the EU and UK with both sides sticking to their guns. It was therefore some good news that Prime Minister Boris Johnson will head to Brussels in June to meet with the EU ahead of the key end-of-June deadline in which the UK could extend the transition period.
Away from Brexit it was the Bank of England’s Saunders sharing his views on the UK economy and the necessary monetary policy stance from Threadneedle Street.
AUD: Hong Kong law gets passed in China
The Aussie dollar continues to hold up well despite the rising US-China tensions, exacerbated by China’s new Hong Kong Security law, which passed though another layer of bureaucracy towards law on Thursday.
US Secretary of State Pompeo said Hong Kong is “no longer independent from China.” Australia relies on the free flow of global goods to China to keep the main customer for its raw material exports in good shape.
The bill is bad news for Hong Kong since it probably leads to more protests and if investors lose confidence in the region’s independence, less capital will flow from overseas. How quickly that capital dries up could depend on the announcement President Trump will make this week on the US ‘response’ to the new Hong Kong law.