gbp-aud-forex
  • Pound (GBP) extends gains versus Australian Dollar for third consecutive session
  • Australian Dollar (AUD) investors weigh up vaccine optimism against UK – China tensions over Hong Kong
  • US non-farm payroll to dictate sentiment and drive risk sensitive Aussie Dollar
  • Pound Autralian Dollar exchange rate (GBP/AUD) trades above 1.8050

The Pound is extending gains across the board shrugging off Brexit woes. The Pound settled +0.4% higher versus the Aussie Dollar on Wednesday at 1.8039. At 08:00 UTC. GBP/AUD trades +0.15% at 1.8058.

A Brexit deal is looking even more elusive after German Chancellor Angela Merkel confirmed that post Brexit trade negotiations had made minimal progress. She warned that the EU must prepare for the possibility of no agreement being reached between the EU and the UK.

Failure for the two sides to agree to a trade deal means that the UK will leave the EU on unfavourable World Trade Rules. This would be damaging for the UK economy. However, Pound traders are managing to brush Angela Merkel’s comments off for now.

Vaccine optimism is keeping the mood in the market elevated following news that the vaccine candidate by drug maker Pfizer, together with German BioNTech is seeing a strong immune response and is being well tolerated in early stage human trials. A vaccine is the quickest and surest way for life to return to normal and the global economy to rebound.

The China proxy, the Australian Dollar is under some pressure as tension between China and the west move up a notch. The arrest of protestors in Hong Kong as China implements its new law to crack down on dissenters has sparked a strong reaction from the UK, which states it is in clear violation of the 1894 Joint Declaration.

Attention will now turn towards the US non-farm payroll for further clues as to how the fragile economic recovery to progressing even as the US records 50,000 new coronavirus cases a day. This could drive sentiment across the US session.

Analysts are expecting 3 million new job to have been created in June. A weaker than forecast reading could be on the cards following yesterday’s disappointing ADP private payroll report.

 

 


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