May interest rate hike from the BoE now in question

GBP AUD Dips Again Ahead of BoE Rate Decision

BoE Interest Outlook weakens Sterling

After recent gains for the pound against the majority of major currencies we have seen the fragility of sterling demonstrated. We have seen a fall in inflation, retail sales and GDP. GDP fell to a five year low at 0.1%. A rate hike from the Bank of England (BoE) was largely factored into the exchange, but following a host of poor data we could see a hike delayed and this is the cause for the current fall in the Pounds value.

There are also concerns regarding the customs union situation. Theresa May will hold a cabinet meeting tomorrow on whether Britain should remain in a customs union with the EU. Brexit negotiator Oliver Robbins is pushing forward a proposal that will keep the UK in a customs partnership and Theresa May is behind this proposal, unfortunately the majority of the cabinet are not so keen. Keep a close eye on developments as this has the power to influence the markets.

GBP/AUD – Buyers move in the 1.84s, sellers 1.82s

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