GBP/AUD Exch Rate Flat, Trade Talks Delay | Finance Brokerage

The Pound to Australian Dollar (GBP/AUD) exchange rate was mostly rangebound in forex trading this morning. This was amidst the news that a review into the US-China phase 1 deal has been postponed.

The GBP/AUD exchange rate was trading at around AU$1.8240. It was virtually unchanged from this morning’s opening rate.

Australian Dollar Steadies

The Australian Dollar is trading in a narrow range against the Pound this morning. This followed the news that a six-month review of the US-China phase one trade deal was postponed over the weekend.

The two sides had been scheduled to hold a six-month compliance review on Saturday. But the talks between US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He were delayed. This was due to a reported scheduling conflict.

Sources say the delay was also to provide China with more time to fulfill its commitment. It is committed to purchase more US exports.

It is reportedly well behind targets to increase purchases by $77bn against 2017 levels.

Observers suggest the extra time for compliance will help to salvage the deal.  It will allow President Trump to hail the deal as a major win in the lead up to the election.

In forex news, more time being given helped to cheer market sentiment and buoy the Aussie. It eases fears the deal was under threat following the recent flare up in tensions between the US and China.

GBP: Pound Steadies amidst Brexit Uncertainty

The Pound (GBP) was muted this morning in the FX markets amidst concerns over Brexit.

The EU’s financial services chief, Valdis Dombrovskis, warned that the City of London may have to wait beyond 2020. This is to learn whether it has retained access to the whole of the EU’s market, known as equivalence provisions.

The EU’s own regulations are currently in flux due to a recent overhaul, according to Dombrovskis.

This will prove a major headache for the UK’s vital financial sector. It could result in regulators in the UK needing to strike agreements with counterparts on a country-by-country basis.

The Brexit talks will resume on Tuesday. The way in which the EU handles its equivalence provisions means these will not be part of negotiations.

Meanwhile, the  dollar weakened in early European trade on Monday. It was weighed by worries about the U.S. economic recovery. Political tensions rise and ahead of the release of the latest Federal Reserve minutes.