GBP/AUD Drops Below 1.77 (Matthew Vassallo)

Pound Pushes Higher Against the Australian Dollar on Recent Economic Divergence

GBP/AUD rates have dipped during Wednesday morning’s trading, with rates dropping below 1.77 on the exchange. This move has come following the release of the latest Reserve Bank of Australia (RBA) interest rate decision over night. Despite the fact the RBA kept their base interest rate on hold at 2.5%, governor Glenn Stevens made an address in which he was fairly bullish about the Australian economic recovery and this seems to have given the AUD a boost, which has been reflected in this morning’s market movement. Mr Stevens also alluded to the fact the RBA would keep rates on hold for a sustained period, news that will help to alleviate fears that the RBA may cut rates again in the short-term.

Looking ahead to the rest of the trading week and tomorrow we have the latest Bank of England (BoE) interest rate decision and monetary policy statements. Whilst we anticipate rates will be kept on hold any indication that they may rise sooner than expected is likely to give the Pound a boost. We also have the latest set of Australian Retail Sales figures being released overnight, which coulod cause the AUD to spike before European trading opens tomorrow.

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