interbank midrate

The Australian Dollar (AUD) extended its run higher against the British Pound (GBP) reaching 0.5200 (1.9225) post Monday’s open off last week’s 0.5110  (1.9570). This move wasn’t to last with the Pound clawing back losses into Tuesday to 0.5170 (1.9340). Tomorrow’s Australian CPI release could strengthen the argument for further policy restrictions if the number comes in higher than 2.1% (September) as we predict. We expect the cross to retest 0.5215 (1.9170) this week.

Current Level: 0.5173
Support: 0.5080
Resistance: 0.5215
Last week’s range: 0.5110- 0.5200

UK inflation remains stubbornly high with the October number coming in at 2.3% against a consensus of 2.2%. This is much higher than the September figure of 1.7% with goods prices rising again. The Bank of England (BoE) meeting in December now suggests a “pause” is on the agenda with rate cuts also in February also now in question. Not “off the table” completely but reduced. UK Retail Sales prints tonight and should reflect a poor number as growth in the sector over November slumps. On the chart price has posted 0.5175 (1.9320) a 7-week low in the cross.

The current interbank midrate is: AUDGBP 0.5170 GBPAUD 1.9342

The interbank range this week has been: AUDGBP 0.5108- 0.5178 GBPAUD 1.9311- 1.9574

The rebounding UK economy may have hit a brick wall, with the advent of the Labour Governments first Budget. The Budget was a toxic combination of increased taxes, increased spending and greater deficits and debt. This is the recipe for disaster and are already being suffered, as witnessed in last week’s plunging GDP growth reading. Economic growth tumbled and now attention turns to UK inflation. If UK inflation reverses recent trends and heads north again, that spells ‘Trouble’. The cross-rate volatility has been limited as the AUD has suffered precipitous loses, along with the GBP.

The current interbank midrate is: AUDGBP .5140 GBPAUD 1.9455

The interbank range this week has been: AUDGBP .5090-.5140 GBPAUD

The Bank of England (BoE) cut their interest rate Friday from 5.00% to 4.75% as widely expected. The vote, an 8-1 decision was accompanied by benign policy guidance with a gradual approach to slowly removing restraints. The recent budget reinforcing a boost to growth and inflation. The British Pound (GBP) pushed higher over the news to0 0.5090 (1.9650). Heading into Tuesday the AUD has recovered slightly to 0.5110 (1.9570) as we await Australian Jobs data this week.

Current Level: 0.5107
Support: 0.5080
Resistance: 0.5175
Last week’s range: 0.5055- 0.5147

The RBA held interest rates unchanged Tuesday at 4.35% as we expected emphasising the need to remain focused on upside risks to inflation. The Australian Dollar (AUD) rising to 0.5055 (1.9780) before returning to post 0.5112 (1.9560) as US Election voting kicked in. The first rate cut for the RBA may not come until the February meeting in 2025. The RBA may wait until the 4th quarter CPI release on the 29th of January 2025 before making a decision on this. The Bank of England are widely expected to cut 25 points in the morning to 4.75% however they may signal a shallower easing cycle if new budget forecasting comes into play.

Current Level: 0.5100
Support: 0.5040
Resistance: 0.5170
Last week’s range: 0.5029- 0.5109