The Australian Dollar (AUD), British Pound (GBP) remained within its recent range over the week, the Aussie outperforming, reversing last week’s losses to 0.5645 (1.7720). Early in the week the RBA raised their cash rate to 2.85% form 2.6% as markets were predicting with the central bank saying future rate increases will be decided by incoming data. The RBA’s outlook for global growth has worsened over the last couple of months with 3.0% this year and just 1.5% 2023 and 2024. Expectations of inflation for 2023 is circa 4.75% from the current 7.3% if the RBA can manage interest rates. Overnight the Bank of England (BoE) members voted 9/0 raising their interest rate from 2.25% to 3.0% early this morning, the largest rate rise for over 30 years. The Central bank admitted that the large hike will likely shift the economy into a recession very soon which could last well over 1 year. The Bank of England governor saying, “it’s a tough road ahead”. Despite the AUD improving we still believe it’s a good time to sell GBP.
The current interbank midrate is: AUDGBP 0.5635 GBPAUD 1.7746
The interbank range this week has been: AUDGBP 0.5516- 0.5672 GBPAUD 1.7628- 1.8126