It wasn’t a surprise to see the British Pound (GBP) drop away against the Australian Dollar (AUD) post the Bank of England (BoE) cash rate last night. The central bank left their key rate unchanged at 5.25% in a 7-2 vote by members- the BoE saying they expect to cut rates twice this year suggesting the first cut to happen at their August meeting. The cross fell from 0.5265 (1.8990) post release to sit 0.5285 (1.8915) in morning trade, corresponding to an 8 Jan 2024 high. UK’s inflation is predicted to remain sticky leading into year end with a 2.0% target reached around next April. A retest of the 2024 open at 0.5360 (1.8660) looks the ticket with central bank divergence to worsen over the coming months.
The current interbank midrate is: AUDGBP 0.5281 GBPAUD 1.8935
The interbank range this week has been: AUDGBP 0.5253- 0.5291 GBPAUD 1.8898- 1.9035