- Low hopes for progress in Brexit trade talks weighs on Pound (GBP)
- Risk sensitive Australian Dollar (AUD) rises post ECB support
- US – Chinese tensions take a back seat
- At 09:15 UTC, GBP/AUD trades -0.2% at 1.8093
Bullish momentum continues to lift the Australian Dollar on Friday. The Pound Australian Dollar exchange rate is trending lower for the sixth straight session, putting the pair on track for a -2.2% fall across the week. This will mark the fifth consecutive week of declines for the exchange rate.
At 09:00 UTC, GBP/AUD is trading -0.2% as is slips through 1.81 and trades at the lower end of its daily traded range of 1.8050 – 1.8173. The pair struck a fresh 8 month low as the risk on narrative continues in the market and ahead of Brexit trade talks update.
Brexit talks, that have taken place across the week, conclude today. Little progress is expected to have been made at the last round of talks ahead of a key summit later this month. The two sides, the EU and the UK, are reportedly far apart on key sticking points including the future alignment of business regulations and access to UK fishing waters.
The lack of progress is expected to be confirmed by chief EU chief negotiator later today, when he gives an update. This will increase pressure on leaders to move the stalemate forward when they meet later this month.
The risk sensitive Australian Dollar continues to advance as the mood in the market remains firmly risk on.
The market continues to focus on the reopening of global economies along with government and central bank stimulus.
A move by the European Central Bank to expand its emergency bond buying programme has added to the upbeat mood. The ECB increased the Pandemic Emergency Purchase Programme by €600 billion, ahead of the markets expected €250 – €500 billion increase. The ECB’s willingness to offer extensive support has lifted risk appetite ahead of US jobs data later today.
With no fresh headlines, US – Chines tensions appear to have eased slightly at the end of the week, which is also offering support to the China proxy, the Aussie Dollar.
