The middle part of last week's session saw Sterling receive a boost when the minutes of the Bank of England monetary policy committee meeting from earlier this month were released. They revealed that the nine man committee had unanimously voted to maintain the UK's current monetary policy stance for another month (at least). Rumours leading up to the minutes had suggested that an extension to the bank's current £375 billion quantitative easing programme or even a surprise cut in British interest rates, might be on the cards.
Things got better for Sterling as the week drew to a close when UK retail sales figures for July showed that UK shop sales had increased, confounding analysts who had predicted a slight drop-off. June's Retail Sales numbers were also upwardly revised, triggering further support for Sterling. The GBP-positive news sent Sterling up to £/AU$ 1.5074 against the Australian Dollar around lunchtime on 17th August, the highest level for three weeks. However, the mini-recovery in Sterling/Australian Dollar proved to be short-lived, as a stronger-than-expected Michigan Confidence survey was released in the US just before UK close of business on Friday, eliciting a sharp improvement in global investor sentiment which benefitted the Australian Dollar.
So far this week Aussie strength has continued as GBPvAUD is threatening to move below £/AU$ 1.5000. If tonight's Reserve Bank of Australia minutes repeat the relatively ‘go-ahead' tone of last month, then there could be further downside to come for the pair. With the latest UK GDP growth figures, due for release at the end of the week, unlikely to be anything other than disappointing, a renewed run at its 5-month low of 1.4711 could be possible for the pair. A break down through this level would then bring February's 27-year low at 1.4555 into view.
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