• Pound (GBP) is dropping after UK PM said a Brexit trade deal needs to be agreed by 15th October
  • British government also looking to override parts of the Brexit divorce deal
  • Australian job ads increase 1.6% in August, after jumping 19.1% in July
  • Australian business confidence in focus

After rising +0.6% across the previous week, the Pound Australian Dollar (GBP/AUD) exchange rate is heading southwards at the start of the week. The pair settled on Friday at 1.8237. At 08:15 UTC, GBP/AUD trades -0.6% at 1.8134, this is at the low of the daily traded range.

Brexit fears are front and central for Pound investors today ahead of Brexit talks and following a ramping up of pressure by Prime Minister Boris Johnson. The British government announced it will give the EU just 38 days to strike a Brexit deal, setting the deadline for October 15th.

In  a shock move, the Government also plans to introduce domestic legislation which will partially override the Brexit divorce deal, a move which could throw trade talks off course. The threat of such legislation is being used as leverage to get a free trade deal done.

Should the two sides fail to agree to a trade deal by the new 15th October deadline, the UK will leave  the Brexit transition period on unfavourable WTO terms.

The Australian Dollar is advancing after data revealed that job advertisements, a closely watched gauge by the Reserve Bank of Australia, which provides clues over the health of the Australian labour market, rose for a third straight month in August.

Total job ads rose 1.6% to an average of 109,103, up from 63,939 back in the aftermath of lockdown. Whilst it is the third consecutive month that ads have increased, the rate of that increase has slowed. Ads had increased 41% in June and 19.1% in July. In August they rose by 1.6%.

Unemployment is expected to continue rising to around 10% in the coming months as the covid crisis and recent lockdown in Melbourne hamper the recovery in the labour market.

Attention will now turn to Australian business confidence data. Investors will be keen to see whether the resurgence of covid in the state of Victoria  weighed on business sentiment.