Predominantly risk off markets this week has seen the Australian Dollar (AUD) extend losses from mid last week’s 0.5235 (1.9100) levels to reach 0.5140 (1.9450) Wednesday against the British Pound (GBP). The Aussie fought back however to 0.5180 (1.9300) post the Australian employment print which still showed a modestly tight labour market. Earlier UK CPI y/y printed at 3.2% down from 3.4% in February slightly higher than forecast of 3.1% helping to support the GBP, the largest contribution towards the number being a drop in food prices. BoE governor Bailey saying next month he predicts a larger drop to the CPI figure. We expect further downside moves in the AUD over the medium term.
The current interbank midrate is: AUDGBP 0.5158 GBPAUD 1.9387
The interbank range this week has been: AUDGBP 0.5139- 0.5208 GBPAUD 1.9199- 1.9456