The Aussie Dollar has been boosted overnight and is currently trading up against most other major currencies. The reason for the boost is in the early hours of this morning Inflation figures were released in the form of CPI (Consumer Price Index) data.
Last quarter consumer prices rebounded by more than expected whilst the annual pace of core inflation edged up for the first time in a year.
The boost to inflation will likely deter the Reserve Bank of Australia from cutting their interest rate further from 1.5%, with their next opportunity to make a change coming early next week. Based on the figures that came out in the early hours this morning it’s looking unlikely that there will be a cut and that’s currently being reflected within Aussie Dollar exchange rates.
This positivity for AUD has come at a time when the Pound is coming under increasing pressure. Yesterday the Governor of the Bank of England , Mark Carney gave a speech to the House of Lord’s Economic Affairs Committee and declared that the BoE cannot ignore the substantial drop in Sterling’s value.
Such dovish comments from Carney could be considered an allusion to further monetary easing in the upcoming weeks/months, and it’s sounding more likely that there will be another Interest Rate cut from the BoE, down to 0.10% from the already record low of 0.25%.
The next major news out of the aforementioned countries is likely to be this Thursday’s UK GDP figures, which come out at 9.30am. Expect a figure below the expected 0.3% to weigh on the Pound as the currency is already trading in a sensitive fashion.