The Australian Dollar (AUD) extended gains over the British Pound (GBP) this week to 0.5820 (1.7180) Wednesday bouncing off the January 2018 high. The RBA decided to retain the current cash rate of 0.10% Tuesday in the wake of supply chain issues, inflationary pressures, and ongoing problems in the Russian war against Ukraine. Bond values have risen and so have future interest rate increase prospects. Lowe saying the country remains resilient as they shake off Omicron. Also of note is unemployment which is expected to drop below 4% this year. We expect interest rates to be hiked as early as next month ahead of June’s expectation back from August 2022 forecasts. The GBP was unable to hold 0.5800 drifting back to 0.5720 (1.7480) Friday over hawkish Fed speak and risk shifts. Key focus next week is Aussie employment data.
The current interbank midrate is: AUDGBP 0.5721 GBPAUD 1.7479
The interbank range this week has been: AUDGBP 0.5711- 0.5823 GBPAUD 1.7173- 1.7508