The improvement in economic sentiment and confidence in the UK economy, following the election of the new Labour Government has seen support for the GBP improve. This has allowed the cross rate to move back towards 0.5100. The higher interest rates in Australia will ensure support for the currency, as the Bank of England continues to cut rates. The other threat to the GBP, is the looming first Labour budget. Serious and challenging economic conditions remain in the UK, and the preference for improving a dire fiscal position, may tempt the Government to raise tax rates. This could have a negative impact and ensure some upside for the AUD, in terms of the cross-rate.
The current interbank midrate is: AUDGBP .5160 GBPAUD 1.9379
The interbank range this week has been: AUDGBP .5100 – .5170 GBPAUD 1.9342 – 1.9607