The Australian Dollar (AUD) has underperformed this week as weakness in the Chinese currency and precious metal prices have weighed down the currency. The British Pound (GBP) rallied post UK inflation data Wednesday, the cross clocking 0.5270 (1.8970) as inflation data published much higher than forecast coming in a massive 8.07% year on year. Future rate moves for the Bank of England will depend on developing inflation raising chances the bank will keep raising. The bank could end up hiking another 25 points in June then again in August and September. The BoE said, “we expect inflation to exceed forecast modestly”. They will have no choice but to keep tightening policy in order to return inflation to its target band. This raises the chances of the UK economy falling into a recession more likely and for longer. A break below 0.5250 (1.9050) and we are into early 2022 levels.
The current interbank midrate is: AUDGBP 0.5275 GBPAUD 1.8957
The interbank range this week has been: AUDGBP 0.5270- 0.5359 GBPAUD 1.8659- 1.8975