Sterling has come under pressure once again vs the Australian Dollar as the UK has a big day ahead for economic data which will impact GBPAUD exchange rates.
The UK Quarterly Inflation Report is published at the same time as the Bank of England interest rate decision and I think this could cause big movements for Sterling in a negative direction vs the AUD as inflation is worryingly low.
Inflation was measured last week at just 0.2% well below the Bank of England’s target of 2% and until things start to improve then the BoE will find it difficult to raise interest rates in the UK.
Indeed, recent speculation is that interest rates won’t rise until May 2017 which has caused confidence in the Pound to fall recently.
I expect the Quarterly Inflation Report to shows big problems for inflation which is something that Mark Carney will be asked about at today’s meeting.
Also, for many months now the MPC have voted 8-1 in favour of keeping rates on hold so if there’s a split to 9-0 then I think we could even see GBPAUD rates move towards 2 on mid-market going into the weekend.
Forecast for today is for Australian Dollar strength vs Sterling.
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