The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was little moved on Monday due to a lack of market moving data from the UK and the closure of the US markets for the Presidents Day National Holiday.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a session high of 1.985
Despite the release of data earlier in the session, which showed that, the number of Australian car sales fell by 1.5% in January. According to the Australian Bureau of Statistics, the decline in car sales was a surprise following the 2.6% increase seen in December.
Trade for the currency pair is expected to be relatively muted in today’s session, as the market’s attention looks ahead to Tuesday’s release of the Reserve Bank of Australia (RBA) policy meeting minutes for February.
‘It’s been a quiet open at the markets. The RBA stands willing to cut rates as the employment situation and the economy continue to stagger along,’ said Stuart Ive, senior client advisor at OM Financial.
The minutes are likely to offer some insight as to why the bank’s policy makers chose to cut interest rates to a new record low level of 2.25%. The minutes will likely offer more guidance as to whether the bank will choose to cut interest rates again in March.
‘While in the medium-term domestic factors will be critical for the Australian Dollar, this week it is likely that the international scene will set the direction. The key domestic event will be the February RBA board meeting minute, which are unlikely to provide new information,’ said ANZ Group senior foreign exchange strategist Daniel Been.
Also due for release on Tuesday will be the latest UK inflation data, which could show that inflation slipped into negative territory in January. If the data comes in weaker than forecast then we can expect the Australian Dollar to push higher against Sterling.
Risk Aversion Could Increase
The exchange rate market will also focus on events in Europe as European Finance Ministers gather to try to end the crisis in Greece.
Risk aversion could also increase if the tentative ceasefire in Ukraine falters and on increased worries over the threat by Islamic Jihadists. Egypt was reported to have launched airstrikes against ISIS affiliated targets in Libya after the terrorist group executed a number of Christians.
