Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By Pound Sterling Forecast (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

GBP AUD Still on the Front Foot with Rates

% of readers think this story is Fact. Add your two cents.


The GBP AUD exchange rate recovered early week losses to close slightly lower, but it may see further benefits from the interest rate hike last week. Analysts at ING said last week that they see another two hikes in March and May, before the bank stops there. That keeps the interest on UK investments at more attractive levels than Australia with the inflation picture down under seeing no immediate move by the RBA.

The GBP to AUD rate opens the week above the 1.9100 level which was resistance back in August.

Bank of England governor criticised for late show

The Bank of England Governor Andrew Bailey has been accused of failing to act quickly enough to ease the cost-of-living crisis threatening the country.

Gerard Lyons, a former adviser to the Prime Minister, said Bailey had a “complacent attitude” towards inflation.

Lyons added that Bailey had “misread” the economy and not communicated effectively with the markets. By failing to “nip inflation in the bud”, the Bank had not helped to ease the cost-of-living strain.

Speaking to The Mail on Sunday, Lyons said: “Throughout the last year their inflation forecasts have been poor and wrong. While the initial inflation shock was triggered by higher energy prices and supply shocks, the governor took a complacent attitude to the possible inflation risk.”

The previous BoE Chief Economist had warned of an “inflationary tiger” looming for the UK and left his role very soon after, possibly because his tone diverged from the bank’s dovish policy members.

ING analysts see a rate hike in March and May, which should take interest rates nearer to 1%.

Quantitative easing moves could come from RBA next

The market was focused on interest rate rises last week, but Reserve Bank governor Phil Lowe provided an important clue for his next move, according to AFR.

The bank is set to wind down its asset purchases program, but it delayed any decision on what the RBA will do with the A$350 billion in bonds that it purchased throughout the pandemic.

One option is to allow the bonds to mature, which would shrink the size of the Reserve Bank’s balance sheet. After the RBA board meeting on Tuesday, the bank’s governor said, “the board will consider the issue of the reinvestment of the proceeds of future bond maturities at its meeting in May”.

But he added further details in a speech to the National Press Club the next day, where he said that the reason the bank bought bonds was to counteract other central banks’

“If we hadn’t also done this, our bond yields and exchange rate would have been higher than they have been, and this would have impeded the recovery from the pandemic.”

But Lowe also hinted that the Reserve Bank could reduce some of the monetary support in May, if the Aussie economy continued to perform well.

“The large gaps in the maturity profile mean that we have more time to make a decision. The next maturity of an Australian government bond is in July 2022,” he said.

The post GBP AUD Still on the Front Foot with Rates appeared first on Pound Sterling Forecast.



Source: https://www.poundsterlingforecast.com/2022/02/gbp-aud-still-on-the-front-foot-with-rates/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.