The pound shot higher against the aussie yesterday after suspicions were quashed that the Bank of England may have recently considered further easing.
- Minutes from the latest MPC meeting revealed a more encouraging note upon the prospect of the UK economy, and signaled that currently no further extension of loose monetary policies were necessary, which supported demand for the pound.
- Additionally, the rise of recent risk appetite took a brief pause as traders awaited an interest rate decision from the Fed, which weakened demand for higher-yielding currencies.
- However, during Asian trading, the Tokyo’s Nikkei index rose 0.9% in its first day of trading following a three day holiday, which encouraged investor demand for the aussie, pushing it higher, and currently trading 0.7% up for the day.
- The aussie was also supported by a US statement that rates would remain low for some time, which buoyed investors to resume selling the US dollar in favour of higher-yielding currencies.
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