interbank midrate

The Australian Dollar (AUD) lost momentum midweek against the British Pound (GBP) dropping from 0.5180 (1.9300) to 0.5120 (1.9530) as “risk on” turned. RBA Minutes highlighted board members considered raising rates but decided that a steady as she goes approach would work best to balance inflation and economic risks. UK Manufacturing and Services sectors both showed improvements this week with Services up at 53.3 from 52.5 while manufacturing improved to 52.5 from 51.1. The Bank of England (BoE) should pause interest rates in September after cutting on the 1st of August. A weekly close around 0.5090 (1.9650) is predicted.

The current interbank midrate is: AUDGBP 0.5122 GBPAUD 1.9523

The interbank range this week has been: AUDGBP 0.5119- 0.5188 GBPAUD 1.9274- 1.9534

The Australian Dollar AUD) finished the week well recovering off 0.5130 (1.9500) area to close at 0.5155 (1.9400) before extending gains Monday to reach 0.5185 (1.9290) as it gathers momentum into Tuesday. Data out in the UK hasn’t been completely convincing of late with GDP for the month of July coming in lower at 0.6% and Retail Sales also disappointing at 0.5% for July. In contrast the RBA has no plans to cut rates with upside risk to inflation while closely correlated commodity prices continue to extend gains. UK Manufacturing is Thursday. 0.5290 (1.8900) is the next target.

Current Level: 0.5180
Support: 0.5065
Resistance: 0.5235
Last week’s range: 0.5122- 0.5176

Moves in the British Pound (GBP), Australian Dollar (AUD) have run sideways over the week trading into Friday around the 0.5140 (1.9450) zone. The Aussie improved Thursday to 0.5165 (1.9360) after Australian Jobs data printed with the number of new employed people in July rising 58,000 compared to 20,000 we expected. Earlier UK CPI y/y was reasonably benign at 2.2% rising from first quarter’s 2.0% but slightly below forecast of 2.3%. UK Retail Sales will end the week of data in the cross with expectations of a result for July around 0.6% improving on June’s -1.2% as household consumption recovers. A retest of the weekly high at 0.5180 (1.9300) is our pick over the coming days.

The current interbank midrate is: AUDGBP 0.5142 GBPAUD 1.9447

The interbank range this week has been: AUDGBP 0.5121- 0.5176 GBPAUD 1.9318- 1.9526

Risk off Monday markets saw the British Pound (GBP) rise against the Australian Dollar (AUD) to post 0.5000 (2.0000) very briefly before falling back through Tuesday to 0.5110 (1.9580) towards the RBA rate release. The central bank left rates unchanged at 4.35% as widely predicted, Governor Lowe more hawkish than expected saying there was no rate cut on the table in the near future with the economy running hot. This helped support the Aussie dollar to reach a 3-week high of 0.5170 (1.9340) into Friday. We may see the AUD retest 0.5230 (1.9130) over the next week.

The current interbank midrate is: AUDGBP 0.5168 GBPAUD 1.9349

The interbank range this week has been: AUDGBP 0.4990- 0.5178 GBPAUD 1.9311- 2.0039

The Australian Dollar (AUD) struggled early week against the British Pound (GBP) falling to 0.5050 (1.9800) in a wash of risk off and Australian inflation data. Australian CPI rose to 3.8% y/y in the second quarter of 2024 from 3.6% in Q1 in line with market expectations with suggestions the RBA may start cutting from November. The Bank of England (BoE) cut to 5.0% as markets predicted with Governor Bailey saying “we should not adjust our course with every data surprise” as inflation is still in question whether it’s on course to decline to the 2.0% target. The GBP depreciated on the announcement with the cross sitting at 0.5120 (1.9530) midday.

The current interbank midrate is: AUDGBP 0.5098 GBPAUD 1.9615

The interbank range this week has been: AUDGBP 0.5047- 0.5120 GBPAUD 1.9528- 1.9810

Not since the Covid pandemic has the British Pound (GBP) been as strong, against the Australian Dollar (AUD) with prices on the verge of clocking the highest weekly close since April 2020. Currently the cross is trading around 1.9655 (0.5085) after starting the week at 1.9270 (0.5190) it’s been unstoppable. UK Manufacturing expanded in July jumping to a 15-month high boosted the GBP. Next week’s Bank of England (BoE) cash rate announcement is now in focus with an expected cut from 5.25% to 5.0%

The current interbank midrate is: AUDGBP 0.5091 GBPAUD 1.9642

The interbank range this week has been: AUDGBP 0.5060 GBPAUD 1.9272- 1.9760