Australian Dollar Currency News: AUD Exchange Rates Rally despite Hawkish FOMC Minutes
Although the chances of an interest rate rise from the Fed in December seems increasingly certain after last night’s FOMC meeting minutes, the Australian Dollar (AUD) has been on a bullish run on Thursday morning. Traders would appear to have been reassured by the relative clarification of the Fed’s stand on monetary policy, allowing risk appetite to increase in the absence of greater uncertainty. Consequently the GBP/AUD exchange rate was slumped in the range of 2.1280.
Earlier…
Following some less dovish comments from Bank of England (BoE) Deputy Governor Ben Broadbent the GBP/AUD exchange rate has been on an uptrend this morning.
Negative UK Inflation Weighed on Pound (GBP), Australian Dollar (AUD) Dominant following Hawkish RBA Minutes
Although markets were anticipating the hawkish set of minutes from the Reserve Bank of Australia’s (RBA) November meeting released on Tuesday this did not prevent the ‘Aussie’ (AUD) from going on a strong bullish run against rivals. Following the substantial slump which the antipodean currency has experienced at the start of the week, demand for the Australian Dollar was bolstered by the indication that the central bank is not particularly inclined to consider an interest rate hike in the near-term.
The Pound (GBP), meanwhile, softened somewhat on the back of mixed October Consumer Price Index data. While the monthly inflation rate did strengthen to 0.1% and the Core CPI also showed an uptick in inflationary pressure, this was balanced out by the baseline CPI remaining negative on the year. Holding steady at a decline of -0.1%, this was the first instance of the annual figure showing two consecutive readings of negative deflation since the introduction of the CPI report in 1996. Consequently, with investors increasingly concerned by the possibility of domestic deflation, the GBP/AUD exchange rate continued to trend lower.
Pound Currency News: GBP Exchange Rate Shored up by Hawkish BoE Comments
Overnight the third quarter Australian Wage Cost Index remained static at 2.3%, while the Conference Board Leading Index edged higher from -0.4% to -0.1%. Commodity prices have remained heavily weighed down, however, with copper trending in the region of a six-year low to suggest that strong pressures remain on the domestic economy.
Following words from Bank of England (BoE) Deputy Governor Ben Broadbent, meanwhile, the Pound has rallied somewhat on Wednesday morning. While the policymaker refused to be drawn on a potential date of the central bank’s first step towards fresh monetary tightening, investors were reassured by Broadbent’s downplaying of the importance of inflation rate forecasts in deciding monetary policy. In response, the GBP/AUD pairing has returned to an uptrend today.
GBP/AUD Exchange Rate Forecast: Dovish FOMC Minutes Could Trigger Australian Dollar Resurgence Today
This evening could see fresh volatility for the ‘Aussie’, as the October meeting minutes for the Federal Open Market Committee (FOMC) are set for publication. As traders have been recently dialling back their expectations for a December interest rate move, following less hawkish comments from policymakers, a more dovish set of minutes could shore up risk appetite.
Thursday’s UK Retail Sales data is not predicted to be especially supportive of the Pound, with forecasts indicating that consumer demand slowed from 5.9% to 3.9% on the year in October. As the prospect of near-term monetary tightening from the BoE seems increasingly unlikely a bearish result here could well soften Sterling.
Current GBP, AUD Exchange Rates
At time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending higher in the region of 2.1423, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing slumped around 0.4667.
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