Sterling falls against the Aussie following Carney’s inflation report (Mike Vaughan)

Risk Appetite Returns, Leading to AUD Strength

Following the pounds strong start to the year the GBP/AUD levels have settled and remained within sight of the 1.80 level for the past few week. Following Mark Carney’s inflation report and suggestion that UK interest rates are set to stay at 0.5% for some time the pound dipped below 1.79 but recovered throughout the afternoon session. For me I believe the GBP/AUD pair has found a degree of stability around this 1.80 mark and it is likely the levels will stay at this level for the foreseeable future. AUD buyers remember you are still some 7% ahead of the levels seen just 6 months ago!

The rest of teh week is looking pretty thin data wise with very little out from the UK or Australia. Watch out for a speech from FED chair Janet Yellen late tomorrow for any impact on risk sentiment.

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