GBP/EUR: Pound Shows Signs Of Recovery After Brexit Inspired Fall

The British pound is higher against the Australian dollar on Thursday.

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GBP/AUD was up by 69 pips (+0.38%) to 1.7893 as of 4pm GMT.

The currency pair dipped below 1.78 before rebounding and turning positive on the day, hitting 1.79 before stabilising. Yesterday the exchange rate fell -0.17%

GBP: Pound weighed down by Brexit

The mood toward post-Brexit EU/UK trade relations seems to turn a little more sombre this week. The UK Chief negotiator David Frost and EU chief negotiator Michel Barnier were both out commenting on the progress of negotiations today. Both seem to think the sides remain far apart on some key issues.

Without a deal in sight, it is the British pound that tends to suffer in foreign exchange markets and not the euro.

An apparent lack of progress on a level playing field or fisheries prompted the EU’s Michel Barnier to say “we are still far away in negotiations with the UK” on Thursday.  After rumours the UK had given up on a deal unless progress was made in July, a senior UK official said they expect talks to continue in the second half of August and into September and that there is no formal cut off date for talks.

AUD: Aussie feeling brunt of china spats

The UK and Australia are both seeing diplomatic ties with China weakened in the wake of the pandemic and new security laws pass in Hong Kong. Still, from the standpoint of trade with China, Australia has a lot more to lose, hence some weakness in the Aussie- even though China’s ire seemed directed more at the UK and the USA than Australia.

According to the Global Times newspaper, China’s foreign ministry is saying it may not recognise BNO (British National Overseas) passports as an official travel document, making it difficult for those residents of Kong Kong to move to the United Kingdom.


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