Home AUD GBP/AUD: Brexit Fears Overshadow Disappointing Australian Jobs Data

GBP/AUD: Brexit Fears Overshadow Disappointing Australian Jobs Data

8th September 2020

Hard Brexit fears are dragging on the Pound (GBP)
The 8^th round of Brexit talks are due to start in London, expectations of a breakthrough are low
Australian payrolls -0.4% in August as covid resurgence hampers recovery
Business confidence is fragile slipping on the NAB index to -6

After tanking lower in the previous session, the Pound Australian Dollar (GBP/AUD) exchange rate is trending southwards for a fourth consecutive session. The pairs settled on Monday -0.6% lower at 1.8085. At 08:30 UTC, GBP/AUD trades -0.2% at 1.8023 as it targets the key level of 1.80.

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The Pound is adding to yesterday’s Brexit inspired losses as the 8^th round of Brexit trade talks are due to begin in London. Hopes of progress are low following months of deadlock.

British Prime Minister Boris Johnson is attempting inject a sense of urgency into the talks. The PM has threatened that if no progress is made this week no deal preparations will be ramped up. His comments came following yesterday’s new deadline – a trade deal must be reached by 15^th October and as the government plans to under-cut parts of the previously agreed Brexit divorce treaty.

Boris Johnson seems to be piling the pressure on and could be pushing the EU to its limits. The EU has warned the UK not to tamper with the Brexit deal. Tension between to the two sides are elevated before these talks have even started.

The Australian Dollar is trading mixed versus its major peers as data from the Australian Statistics Bureau highlighted a worrying trend in the labour market. Data revealed that the number of Australian payrolls fell by 0.4% across August. The state of Victoria continues to underperform the rest of Australia with payrolls down 2%, whilst the rest of Australia saw a 0.1% increase as Victoria battled a second wave of covid infections and Melbourne was put into lockdown.

Separately data also revealed that business conditions in August fell sharply as Victoria relapsed into a coronavirus lockdown. Confidence remains fragile with the National Australia Bank business conditions slipping to -6 points in July, down from 0 the previous month.