The Australian Dollar has been low across the board recently, having even slipped up against the flagging Pound. This is on account of heightened concerns of an Australian interest rate cut in the near-term.
The Pound has also been an unsafe option for investment, having lost out spectacularly after a solid opening to the week on Bank of England (BoE) news.
The ‘Aussie’ has been in a solid state of decline against the Pound and virtually all other major peers recently, with domestic data out of Australia doing little to raise confidence in long-term prospects for the antipodean nation’s economy.
The economic announcement in question has come from the Reserve Bank of Australia (RBA), in the form of the RBA’s minutes for its July interest rate decision, which resulted in a rate freeze against some expectations of a cut.
The recently-released minutes, however, have gone some way to raising expectations of an ‘Aussie’-devaluing interest rate cut in August, by stating that after taking on more information:
‘This…would allow the board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate’.
While the Pound has been able to rise against the worse-off Australian Dollar recently, the UK currency has been in low demand elsewhere, on account of Monday’s impetus for gains being eroded by excessive profit-taking.
The Pound had initially been boosted by comments from Bank of England (BoE) official Martin Weale, who stated that an interest rate cut in August was not necessarily on the table, at least when it came to his vote.
The latest UK news has concerned inflation, which rose from 0.3% to 0.5% on the year in June, though this result was largely disregarded by investors due to the decision by the UK to leave the EU not being factored in until next month’s stats for July.
The near-future will see the announcement of the Westpac leading index for June; this previously printed at 0.2%.
From the UK, greater influence is likely to be had in the evening, when the nation’s unemployment, claims and earnings results are due for June and May.
In brief, claims are forecast to rise, unemployment is expected to remain unchanged at 5% and average earnings excluding bonuses are expected to fall marginally.
The Australian Dollar Pound Sterling (AUD GBP) exchange rate has been trending in the region of 0.5692 and the Pound Sterling Australian Dollar (GBP AUD) exchange rate has been trending in the region of 1.7575 today.
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