Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Little-Changed as BoE Leaves Rates on Hold
The Pound Sterling to Australian Dollar (AUD/USD) currency pair remained trading around the 1.9540 level in the wake of the Bank of England’s (BoE) interest rate decision.
The central bank acted as the vast majority of economists expected by leaving interest rates on hold.
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced by 0.2% during the European session as the ‘Aussie’ lost ground against the US Dollar (AUD/USD) and Canadian Dollar (AUD/CAD).
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Pares RBA Gains after ‘Aussie’ Deemed Overvalued
Earlier this week the Australian Dollar gained on the Pound, Euro, US Dollar and New Zealand Dollar after the Reserve Bank of Australia (RBA) opted to leave interest rates on hold.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a low of 1.9455
As a 25 basis point cut had been priced into the market, the decision was well received by investors and drove the ‘Aussie’ higher.
The Australian Dollar derived further support from positive domestic and Chinese services reports, and the AUD/GBP pairing was able to consolidate gains after the UK’s Markit Services PMI printed below expected levels.
However, the ‘Aussie’ has slipped against the Pound ahead of the Bank of England’s interest rate decision.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate achieved a high of 1.9529
Demand for the South Pacific asset was a little dampened as the RBA’s Deputy Governor Philip Lowe asserted; ‘The scale of global monetary stimulus means that our exchange rate remains relatively high given the state of our overall economy. The end result here is that global developments have left us with a higher exchange rate and lower interest rates than would otherwise have been the case. We may not like this configuration, but developments abroad give us little choice.’
Australia also posted a wider-than-anticipated trade deficit in January, with the shortfall widening from 503 million Australian Dollars to 980 million Australian Dollars.
Domestic retail sales data showed a 0.4% month-on-month increase in sales at the beginning of the year, as forecast by economists.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast: Australian Construction Data Ahead
Today’s Bank of England (BoE) interest rate decision is unlikely to have much of an impact on Pound Sterling to Australian Dollar (GBP/AUD) exchange rate movement as the central bank isn’t expected to make any alterations to fiscal policy.
With inflation remaining low and the UK general election around the corner, the BoE may well keep policy on hold for the remainder of the year.
During the Australasian session the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate could experience fluctuations as a result of Australia’s AiG Performance of Construction Index.
The gauge of the construction sector printed at 45.9 in January, well below the 50 mark separating growth from contraction.
An improved figure would be ‘Aussie’ supportive.
Extensive currency market movement could also be occasioned by the US Non-Farm Payrolls report.
An above-forecast jobs increase in the world’s largest economy would support Federal Reserve interest rate hike bets and reduce demand for higher-risk assets.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7808, The Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.7067, The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9534, The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5118
