The aussie edged higher yesterday as continued strong demand for the high-yielding currency offset positive employment data in the UK.
- The UK currency found early support following better-than-expected employment data that revealed the rate of people claiming benefit allowance was declining.
- However, the news was unable to buoy a broadly weaker pound, with investors continuing to be attracted by the recent rate rise and general positive sentiment surrounding the Australian economy.
- The aussie also took advantage of rallying equity markets, which took their lead from better-than-expected quarterly earnings at JP Morgan reinforcing the notion that economic conditions are improving.
- In the early hours of this morning, the Reserve Bank of Australia chief made a hawkish speech that has provided a boost to high-yielding currencies. The broad dollar sell off that has ensued has prevented the pound from sliding further against the aussie, with the price currently hovering below 1.75.
- Sterling has also received a boost this morning in the wake of positive words from BoE policymaker Paul Fisher who said that he felt confident that QE was working