GBP/AUD Exchange Rate Weakens as Johnson Prepares for Berlin Trip
The Pound Australian Dollar (GBP/AUD) exchange rate trended lower this morning, as markets brace for Boris Johnson’s meeting with German Chancellor Angela Merkel later in the day.
At the time of writing the GBP/AUD exchange rate is currently trading at around AU$1.7868, down roughly 0.5% from this morning’s opening levels.
Germany to Firmly Reject Johnson’s Backstop Proposal, Pound (GBP) to Extend Losses?
The Pound (GBP) is already on the back foot against the Australian Dollar (AUD) and the majority of its other peers this morning, but could we see these losses extended in response to Johnson’s first overseas trip as Prime Minister?
The UK PM will meet with Germany’s Angela Merkel later today for talks which are likely to be dominated by Brexit and the issue of the Irish backstop.
GBP exchange rates rallied yesterday as Merkel refrained from explicitly rejecting Johnson’s proposals for the Irish border and suggested a practical solution to the problem could be found without reopening the withdrawal agreement.
However observers expect Merkel to be more firm in her rebuttal when the pairing meet today, with Norbert Röttgen, chair of the German parliament’s foreign affairs committee making it clear that Germany stands with the rest of the EU that the withdrawal deal is not up for renegotiation.
At the same time the Australian Dollar (AUD) followed other commodity linked currencies higher this morning as oil prices climbed back above $60 a barrel.
GBP/AUD Exchange Rate Forecast: How Will Australian PMI Figures Impact the ‘Aussie’?
The Pound Australian Dollar (GBP/AUD) exchange rate may mount a tentative recovery overnight on Wednesday, following the publication of Australia’s latest PMI figures.
These are expected to show that growth in the country’s private sector moved closer to stagnation this month, potentially putting more pressure on the Reserve Bank of Australia (RBA) to continue lowering interest rates this year.
Meanwhile, Boris Johnson’s meeting with French President Emmanuel Macron on Thursday is likely to be in focus for GBP investors on Thursday.
However this could put even more pressure on Sterling as Macron is likely to be even more firm in rejecting the UK government’s calls to renegotiate the EU withdrawal deal.