The Pound (GBP) exchange rate remained at a 2-month low against the Australian Dollar (AUD) and New Zealand Dollar (NZD) on Thursday as Bank of England Deputy Governor Ben Broadbent repeated that interest rates rises will be small and vague on the timing of such a rise.
Sterling remained under heavy pressure against the majority of its most traded peers as Wednesday’s Bank of England inflation report warned that UK inflation could fall below 1% over the coming months. The BoE also cut its growth forecasts for the UK economy.
The currency came under more pressure on Thursday after Bank of England Deputy Governor Ben Broadbent reaffirmed that interest rates will not rise until late next year.
‘Everyone perceived that hikes were going to be further down the line anyway but I think the fact that the BoE has come out and said it…is negative for sterling,’ said Richard Wiltshire, a forex dealer from ETF Capital.
Overnight the Australian Dollar eased slightly in Asian trading before recovering strongly after the Reserve Bank of Australia said that it has not ruled out intervening in the currency markets to force the currency lower.
RBA assistant governor Christopher Kent said; ‘Intervention to lower the too high exchange rate is still an option. We have not ruled it out. It is still there as an option, if needed.’
The currency dipped before regaining ground against its major peers. It found muted support from the release of a report, which showed that inflation expectations in Australia increased last month.
According to the Melbourne Institute, inflation expectations for the nation increased to 4.1% in October from 3.4% in the preceding month. Following the data release the Australian Dollar was holding steady against the New Zealand Dollar.
The New Zealand Dollar meanwhile advanced after data showed that the nations Business Manufacturing Index rose to a reading of 59.3 last month, beating the previous month’s figure of 58.5.
Pound Exchange Rate Forecast to Fall Further Against the Australian and New Zealand Dollars
As the week drew to a close the Pound made a weekly decline against the Australian and New Zealand Dollars.
Against the Australian Dollar, Sterling declined to 1.79 a new 2-month low. Against the New Zealand Dollar the Pound fell to 1.98.
UK data due for publication next week is unlikely to offer much in the way of support to the currency.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8726 ,
Australian Dollar,,Pound Sterling,0.5579 ,
Australian Dollar,,Euro,0.6996 ,
Australian Dollar,,New Zealand Dollar,1.1047 ,
US Dollar,, Australian Dollar ,1.1458 ,
Pound Sterling,, Australian Dollar ,1.7924 ,
Euro,, Australian Dollar ,1.4292 ,
New Zealand Dollar,, Australian Dollar ,0.9052 ,
[/table]
