The Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rates softened on Tuesday due to the release of policy meeting minutes from the Reserve Bank of Australia (RBA) and optimism over the ‘Kiwi’ economy.
The GBP/AUD exchange rate hit a session low of 1.967
The Australian Dollar regained ground against the Pound and other major peers after the minutes of the RBA’s February policy meeting showed that the bank’s policy makers are in no hurry to make another interest rate cut in March.
Policy makers also said that a deteriorating economic outlook was the cause for the cut in interest rates. They also mentioned that they remained concerned over the continued strength of the nation’s property market. The activity in the housing sector was a reason for the reluctance to cut rates again.
‘February was a line-ball and they decided to cut because they could use the statement on monetary policy as a means of communicating the rationale behind the cutting of rates. It seems that there was less of a sense of urgency for them to cut the rate in February than the market had expected,’ said Steven Dooley, a currency strategist at Western Union Business Solutions.
The next main event for Australian Dollar movement will be Thursday’s Federal Reserve policy meeting minutes release.
The GBP/NZD exchange rate hit a session low of 2.041
Confidence over the strength of the New Zealand Dollar supported the ‘Kiwi’ against the Pound and most other major peers, against the Australian Dollar the currency hit a record high and edged closer to parity.
Dairy prices are forecast to rise as a drought in some parts of the country will lower supply and increase demand. At the latest Fonterra Global Dairy, auction prices increased by as much as 1%.
The rise adds to the 6.3% increase recorded in December.
The Pound Sterling meanwhile will likely come under pressure from the latest UK inflation data, which is forecast, to slide close to zero on a monthly basis.
