The AUD to GBP momentum has shifted in favour of the Pound this week. The Pound-Sterling rally against the Aussie commenced on Tuesday in light of the RBA Minutes indicating that interest rates in Australia will remain “on hold” for a considerable period. The UK inflation figure fuelled the fire on Tuesday evening, coming in above expectations at 1.8%.
Yesterday evening the Bank of England Minutes were released and the underlying tone was that the officials are getting closer to an interest rate rise. Although it appears that a rise will still be quite some time away, the meeting suggested that it is still a step closer nevertheless. This allowed the Pound to further strengthen and continue the rally that commenced on Tuesday.
Heavy domestic data out of Australia is virtually absent for at least the next week, however, the Chinese Manufacturing PMI figure that is set to be released at 11:45am AEST today is likely to impact the AUD. This economic indicator has been relatively weak over the past few months and another poor result will likely see a further sell-off of the Australian Dollar.
Moving forward, the GBP could cement its recent strength with the announcement of the UK Gross Domestic Product figures this evening. The quarterly and annualised figures of 0.8% and 3.1% respectively are expected to remain the same but if the GDP figures are a beat, than we may well see the value of the Pound continue on its move north against the Aussie.
It appears as though the Australian commodity-linked currency may have reached its’ short-term high against the GBP last week when it experienced a minor rally in its favour. In the meantime, economic data in relation to the AUD-GBP currency pairing will be watched closely for any indication to suggest whether or not the recent Sterling strength will continue.