Bank of England sinks GBPAUD!

GBP to CAD Rate: Sterling Gains Against the Canadian Dollar Ahead of Bank of Canada Statement

GBPAUD rates have had a busy day with the Bank of England meeting leading to a weaker Pound. The latest levels have now been trading in the 1.76’s which is lower than the lowest point in 2 weeks. Sterling weakness is a factor, but also global sentiment has helped the Australian slightly.

The main news today is the Bank of England interest rate decision. This has seen the raise of 0.25% as expected. This did not however help the Pound for long as Mark Carney’s comments afterwards reflected a lack of confidence in the market for future interest rate rises.

GBPAUD could now well trade lower as the market awaits further news on just what Brexit will mean. Whilst there have been fresh trade war concerns today destabilising confidence slightly the weaker Pound has been the main driver on this pair.

The major news on the Australian Dollar side will be the next interest rate decision but with investors widely expecting no change in their fairly neutral outlook, GBPAUD levels could remain range bound. I would expect the trading price to now remain in the 1.70’s, a move above 1.80 will require a real boost of confidence in Sterling, something that I believe will be found lacking.

Global market sentiments will help drive the Australian Dollar too, a prime example would be the expectations on the trade wars and also the US economy. Last night the US Federal Reserve laid down foundations for an interest rate hike which should see the US Dollar strengthen and also puts some interesting questions out there about the Australian Dollar.

Generally, we would see a stronger US Dollar weakening the Aussie, as investors shift funds to the higher yielding USD. However, in this case too, we might see the Aussie strengthen since the improved sentiments reflected by a stronger US Dollar and US economy, bode well for their export and raw material driven economy.

If you wish to consider any transfers buying or selling Australian Dollars then the next few weeks on Brexit could prove interesting. A quick chat with our expert team might be beneficial to create a strategy relevant to your position. Feel free to get in touch using jmw@currencies.co.uk.