- Pound (GBP) is under pressure as Brexit concerns mount
- Attention turns to BoE Governor Andrew Bailey’s speech at Jackson Hole
- Australian Dollar (AUD) advances despite China trade issues
The Pound Australian Dollar (GBP/AUD) exchange rate is declining for the third straight session. The pair settled on Thursday -0.4% at 1.8178. At 08:00 UTC, GBP/AUD trades -0.11% at 1.8155. This is at the lower end of the daily traded range.
Brexit concerns have plagued the Pound for most of the week after talks last week saw little or no progress. Downing Street has been warned that Prime Minister Boris Johnson has just two weeks to save post Brexit trade talks.
EU chief negotiator Michel Barnier and his UK counterpart David Frost will hold emergency talks next week in an attempt to save negotiations.
Attention will now turn towards Bank of England Governor Andrew Bailey who is due to give a speech at the virtual Jackson Hole summit. Investors will be listening closely for clarity over negative interest rates.
Andrew Bailey has previously said that negative rates were a tool in the central bank’s toolbox. He also said that he was not planning on using that tool at the moment. With the government withdrawing from the job retention scheme over the coming months, investors will be keen to hear more on whether the BoE will consider negative rates now or whether it will stick to its preferred tried and tested stimulus approach?
The Australian Dollar is advancing across the board shrugging off news that China announced a ban on Australian beef imports owing to a banned substance being found.
The Aussie Dollar, which is also known as a China proxy, is also looking past comments by President Trump to end reliance on China once and for all in his acceptance speech at the 2020 Republican National Convention.
Looking ahead, next week kicks off with a slew of relevant data including Chinese manufacturing figures and Australian inflation numbers on Monday, followed by GDP data later in the week.