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British Pound to Australian Dollar Exchange Rate (GBP/AUD) Bullish in Currency Markets

August 18, 2014 - Written by Tim Boyer

The Pound to Australian Dollar exchange rate is presently trading at 1.79139 GBP/AUD (revised 20/08/2014), climbing steadily higher in the currency market after catalyst Mark Carney, Governor for the Bank of England (BoE), stated that the UK interest rate hike timeframe may surprise many. This session has seen the Pound reach highs of 1.7969 versus lows of 1.7926, as Sterling’s place against other majors becomes more prominent in the currency market. Both currencies however are awaiting the release of meeting minutes by their respective banks; the Reserve Bank of Australia (RBA) minutes are released Tuesday, and the Bank of England’s follow publication on Wednesday.

- The Australian Dollar to Canadian Dollar exchange rate is trading up +0.05% at 1.01762 AUD/CAD.
- The Australian Dollar to Euro exchange rate is trading up +0.18% at 0.69927 AUD/EUR.
- The Australian Dollar to Pound Sterling exchange rate is trading down -0.21% at 0.55823 AUD/GBP.
- The Australian Dollar to New Zealand Dollar exchange rate is trading up +0.24% at 1.10680 AUD/NZD.
- The Australian Dollar to US Dollar exchange rate is trading down -0.11% at 0.92873 AUD/USD.

Carney caused buoyancy for the Pound following his statements on Sunday that he believes rate hikes will happen regardless of wage figure growth which many were using as a guide for the timeframe of hikes. Last week saw the Pound plummet after the Bank of England’s Inflation Report suggested the prospects of interest rate hikes were far from positive. However Sunday caused a boost for the Pound with Carney proving encouraging, stating: ‘We have to have the confidence that real wages are going to be growing sustainably (before rates go up). We don’t have to wait for the fact of that turn to do so. Monetary policy is heading in a different direction in at least two of the four [countries]... We will do what we need to do.’

With Carney veering on the side of hawkish in his remarks, he’s instilled confidence that UK rate hikes are potentially not as far away as some had thought. However, some have criticised Carney for his lack of consistency in statements; not forgetting the Pound’s jump to a five year high against the US Dollar (USD) when Carney hinted that UK rate rises were going to materialise in the near future. However, since then the Bank of England has played the dovish card, being termed as an ‘unreliable boyfriend’ for the UK economy. A former BoE Monetary Policy Committee [MPC] member, Andrew Sentance, has commented on the BoE’s behaviour stating: ‘At some point their hand may be forced by events. There is a degree of inconsistency in pushing off interest rate rises as long as you can and still saying they can be done gradually.’

Australian dollar Trades in Anticipation of RBA Minutes

The Australian Dollar is trading tentatively ahead of the RBA’s meeting minutes released Tuesday which could help to boost the ‘Aussie’ if influential. Expert in the field Joe Capurso stated: ‘There’s nothing pushing it around. There’s nothing to look at here ahead of the release of the RBA minutes tomorrow.’ The jobless figure in Australia has risen to highs recently causing fear for many that the Australian economy may not be as strong as first thought. Furthermore Chinese figures have proved less favourable of late, which as Australia’s largest trading partner could cause anxiety.

Where Does the GBP/AUD Exchange Rate Head From Here?

Australia will also see the release of the RBA’s Governor Glenn Stevens Semi-Annual Testimony on Tuesday which will prove highly significant for the ‘Australian Dollar’. The UK however will await meeting minutes on Wednesday, along with important Consumer Price Index and Retail Price Index figures on Tuesday which may give cause for the Pound to gain further in the currency market. The present AUD to GBP exchange rate is trending at 0.5573.
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