interbank midrate

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

The Australian Dollar (AUD) has been sold off hard on the weekly open against the British Pound (GBP) extending last week’s declines to reach a fresh 3 month low of 0.5140 (1.9460) this morning. UK Retail Sales came in poor at -1.2% for the month of June after solid growth in May of 2.9% as households become cautious. The data had minimal effect on the cross as markets have been “risk averse” on the fallout of Biden exiting from the presidential race. UK Manufacturing prints later today, expected to come in decent and give the Pound a further boost.

Current Level: 0.5131
Support: 0.5120
Resistance: 0.5170
Last week’s range: 0.5168- 0.5229

The New Zealand Dollar (NZD) rise post mid week’s NZ CPI release to 0.6100 levels was short lived as we expected- the kiwi giving back gains Thursday to clock 0.6040 in late NY trading as downside bias resumed. Earlier US Fed chair Powell said the central bank would not wait until inflation is back at 2.0% to cut rates which could end up sending the NZD higher at some point if we see a policy change. The cross is sitting just above the 10-week low of 0.6033- a swing through here and 0.6000 is the next target zone.

The current interbank midrate is: NZDUSD 0.6035

The interbank range this week has been: NZDUSD 0.6033- 0.6110

The British Pound (GBP) bounced off solid resistance at 1.9350 (0.5170) as we predicted it would against the Australian Dollar (AUD) falling to 1.9290 (0.5185) into early Friday sessions. A higher UK CPI y/y read for June came in at 2.0% based on 1.9% estimates raising concerns for earlier rate cuts by the Bank of England (BoE). Australian unemployment rose to 4.1% as predicted, up from 4.0% in May, the AUD receiving a boost back at 0.5190 (1.9260) overnight during NY.

The current interbank midrate is: AUDGBP 0.5171 GBPAUD 1.9338

The interbank range this week has been: AUDGBP 0.5165- 0.5230 GBPAUD 1.9117- 1.9359