Aussie resumes its climb against the pound, but has capped gains this morning

The aussie dollar continued its upward trend yesterday, pushing on nearly one percent against the pound following bullish words from an RBA official.

  • The Australian dollar rose as a Reserve Bank of Australia official said a move to “more normal” interest rates was appropriate, indicating that the yield gap may widen further.
  • Philip Lowe, assistant governor of the RBA, also mentioned at the conference in Sydney that it was “appropriate” to remove monetary stimulus as the economy improves boosting demand for higher-yielding assets.
  • The Australian currency also traded strongly during the Asian session with demand high as both the Nikkei and Shanghai Composite indices traded strongly.
  • The RBA minutes from their most recent policy meeting, released early this morning, had a hawkish tone, which reinforced views of a steep interest rate hike next month.
  • However, the aussie, which has broadly strengthened in response, is currently trading just marginally higher against the pound, with the price currently around 1.7650.