- Australian Dollar (AUD) mildly higher despite concerns over rising covid-19 cases
- Brexit tensions return, weighing on Pound (GBP) ahead of next week’s trade talks
- With no UK or Australian data due, US data is eyed for further clues on sentiment
- Pound Australian Dollar exchange rate (GBP/AUD) trades -0.3% lower across the week
The Australian Dollar is moving tentatively higher versus the Pound on Friday, extending gains from the previous session. The Aussie Dollar settled on Thursday +0.3% at 1.8033.
At 08:15 UTC, GBP/AUD is trading -0.07% lower at 1.8024 as coronavirus statistics and Brexit dominate.
Riskier assets and currencies, such as the Australian Dollar, are finding buyers despite concerns over rising coronavirus cases lingering. The number of daily cases in the US is unnerving investors, who fear lockdown restrictions being re-imposed or easing lockdown measures being slowed, either of which could knock the fragile economic recovery.
Australia has seen a flare up in coronavirus cases in Victoria with 30 new cases, ticking down slightly after reporting the highest number of new cases in two months on Thursday. Friday is the 10th straight day of double digit covid-19 new cases in the state. Investors will watch developments here closely.
The Pound is struggling to stay positive as EU – UK tensions build ahead of next week’s face to face Brexit trade talks. UK Brexit Secretary David Frost said that some of the EU’s unrealistic expectation will have to change in order for negotiations to move forward. These comments have dampened hopes of a deal being achieved.
David Frosts comments come following EU Chief Negotiator Michel Barnier’s more upbeat comment in the previous session, when he said that a deal was still possible.
The two sides have until the end of the year to agree a post Brexit trade deal, otherwise the UK will adopt unfavourable World Trade Organisation terms. This will be a blow for the UK economy just as it is starting to recover from the coronavirus crisis.
There is no UK or Australian macro data due for release today, leaving sentiment to drive the pair. Investors will look towards US personal spending and income figures and coronavirus statistics to further impetus.