UK, US and Australia defence alliance seek to keep China in check


it was recently announced that the UK, the US and Australia have announced a new defence partnership to keep a check on China’s growing power in the Indo-Pacific.

Prime Minister Boris Johnson, US President Joe Biden and Australian Prime Minister Scott Morrison confirmed the creation of a “new trilateral defence partnership” in a joint statement. 

The alliance, known by its acronym Aukus, would work “hand-in-glove to preserve security and stability in the Indo-Pacific”, the UK's PM said making a frequent reference to the changing situation in the region.

''The UK will embark on this project alongside our allies, making the world safer and generating jobs across the United Kingdom,'' the PM said.

Mr Johnson added, “I’m delighted to join President Biden and Prime Minister Morrison to announce that the United Kingdom, Australia and the United States are creating a new trilateral defence partnership, known as Aukus, with the aim of working hand-in-glove to preserve security and stability in the Indo-Pacific. We are opening a new chapter in our friendship.''

 

“This is about investing in our greatest source of strength, our alliances and updating them to better meet the threats of today and tomorrow,” US President Joe Biden said. “AUKUS — it sounds strange, all these acronyms, but it's a good one.”

Meanwhile, the US continues to build partnerships with other nations that serve as a bulwark against China. One such group is known as the Quad, comprised of the US, Japan, Australia, and India. 

''Formed in its current iteration in 2017, the four-nation grouping is cautious about explicitly saying that its economic, technological, and military cooperation is about thwarting Beijing’s aims, but analysts say the Quad wouldn’t be as robust today if it weren’t for China’s continued aggressions,'' Politico reported.

On Sept 24, all four Quad-nation heads will meet at the White House for the first-ever in-person, leader-level gathering of the group.

Market implications

The cold war is heating up although it is not affecting markets at the moment. 

However, the trade war between China and Australia has worsened relations between the countries and that has had an impact on the Australian dollar ever since April 2020 when Prime Minister Scott Morrison asked for an inquiry into the origins of Covid-19.

''So far, this has cost the two nations roughly $4 billion,'' Politico reported, adding that Josh Frydenberg, Australia’s treasurer, this month accused Beijing of trying to exert “political pressure” with penalties on Australian products.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD extends sideways grind around 1.1650 after mixed US data

EUR/USD is struggling to find direction on Thursday and continues to fluctuate in a relatively tight range around mid-1.1600s. Mixed data releases from the US don't seem to be having a noticeable impact on the greenback's performance against its major rivals.

EUR/USD News

GBP/USD struggles to pull away from 1.3800

GBP/USD retraced a portion of Wednesday's during the European trading hours pressured by the renewed USD strength and the souring market mood. With the latest US data failing to trigger a reaction, the pair stays in a consolidation phase near 1.3800.

GBP/USD News

XAU/USD struggles for direction, flat-lined above $1,780 level

The risk-off impulse in the markets extended some support to the safe-haven gold. Elevated US bond yields, a modest USD strength capped the upside for the metal. Bulls need to wait for a move beyond the $1,800 mark before placing fresh bets.

Gold News

Buying Solana now to gain 700% profits by 2022

Solana price has been on a massive run-up in 2021 from $1 to $216 in roughly eight months. This stellar climb is likely to continue into 2022 as significant bullish signs emerge. Moreover, the start of a new bull run will serve as a tailwind for SOL.

Read more

Netflix: Three reasons to sell NFLX after earnings

NFLX has been strong into earnings as investors digested the massive success of Squid Game and hoped this would feed through into very strong subscriber numbers. Netflix was out straight after the bell with earnings.

Read more

Forex MAJORS

Cryptocurrencies

Signatures