The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate rose during Wednesday’s European trading after Bank of England (BoE) meeting minutes disappointed investors.
The BoE announced that the Monetary Policy Committee (MPC) was unanimous in its decision to hold the benchmark interest rate at 0.50%. Pound Sterling sentiment tumbled as bets for a UK rate hike were postponed yet again.
Last year, BoE Governor Mark Carney gained the reputation of being an ‘unreliable boyfriend’ as he hyped up the possibility of interest rate hikes in the UK.
However, Carney backtracked quite significantly as the months went on and weaker economic data emerged. Increases in borrowing costs were expected to occur either before Christmas or in the first part of 2015; however, as today’s minutes show, the bank may be a long way from changing the benchmark bank rate.
The past four meetings showed two MPC hawks vote in favour of hikes, but this meeting broke the divergence.
The minutes read: ‘In view of all members, the outlook justified maintaining both the current level of Bank Rate and the stock of asset purchases financed by the issuance of central bank reserves. Monetary policy could and would be adjusted at the appropriate time to ensure that CPI inflation was on track to meet the 2% target in the medium term.’
However, UK employment figures noted an improvement in the labour market—an event that would usually offer Sterling support.
The UK created 37K new jobs in the three months through November, less than the 74K forecast. Even though the economy created fewer jobs than expected, Jobless Claims Change recorded a -29.7K drop in benefit seekers. The favourable figures allowed the Unemployment Rate to edge past the 5.9% forecast to 5.8% from the previous 6.0%.
Meanwhile, the Australian Dollar was offered a little support when the Westpac Consumer Confidence Index showed a slight rebound in January after a tumble in December. The index reached 93.2 in January down from 91.1 in December.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate could be in for a rocky ride in coming months after Westpac announced it still forecasts Reserve Bank of Australia (RBA) rate cuts in February.
The RBA has previously denied that it has considered slashing rates, yet economists are suggesting that the central bank will need to in order to help growth.
Thursday will see the release of Australian Consumer Inflation figures as well New Home Sales stats which could have a moderate effect on the Australian Dollar exchange rate.
However, Bank of England officials are expected to speak on Thursday and could influence Pound Sterling trading.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trending in the region of 0.5431. The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hovers at 1.8422.
Disclaimer: Currency-Converter.com.au and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. Currency-converter.com.au make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. Currency-converter.com.au shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.