The AUDGBP exchange rate was higher on Monday ahead of PMI data for the manufacturing and services sectors in Australia for November. The figures will help traders to gauge the economic recovery from lockdowns. The UK will see the release of its own PMIs on Tuesday. The Bank of England Governor has hit back at jibes that he was an ‘unreliable boyfriend’.
The AUD v GBP traded near the 0.8400 level after a recent rally in the pound on interest rate talk.
December rate hike still not a done deal for the UK economy
Bank of England Governor Andrew Bailey has hit back at criticism that he was an ‘unreliable boyfriend’ after interest rates were not raised in November.
“Look, you’ve got to have a sense of humour in this job. It’s an obvious cheap shot. But I don’t buy it at all,” Bailey said. Traders used the same jibe aimed at his predecessor Mark Carney following allegations of flip-flopping on interest rates.
“To be clear, at no point did I, or anybody, say, ‘And by the way, we’re going to raise interest rates in November,” Bailey said to the Sunday Times.
Bailey had said last week that he was ‘very uneasy’ on inflation, adding:
“I want to be very clear on that. It is not, of course, where we wanted to be, to have inflation above target. On the decision itself, however, it was a very close call in my view.”
He also said that the labour market looks “tight”, and that this is “the big issue at the moment”.
The market is expecting a December interest rate hike but that was not a done deal and the bank’s Chief Economist said at the weekend he did not know how he would vote in December.
PMI data will shine a light on the Australian economic rebound
The market will get to see Australian PMI activity for the manufacturing and services sectors.
The flash report for November will give some insight into how the country is rebounding from the most recent lockdowns.
Last month saw manufacturing at 58.2, with the services sector at 51.8. with the latter dropping from 58.8 in April. There is a chance that the Aussie economy could see another bounce in this data and support the dollar.
The UK will also see the same PMI data on Tuesday but that is more of a slowdown effect recently as the growth spurt slows in the UK and Europe.
The pound sterling has been supported by an increase in rate hike bets, while the Aussie dollar has been weighed by the dovish tone of the central bank.
Retail sales will be released for the Australian economy on Friday with a forecasted jump to 2.5% from 1.3%. The latest UK data showed that consumers had made an early start to Christmas shopping but that is likely due to shortage fears that were driven by government comments in the previous month.
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