RBA considered a hike but paused

The minutes from the last meeting of the Reserve Bank of Australia revealed that the Monetary Policy Committee actually considered hiking interest rates over concerns about increased shipping costs due to events in the Red Sea. As we know, they left their base rate on hold at their last meeting but the fact that they considered increasing the cost of borrowing should have strengthened the Australian dollar. Interestingly, it hasn’t. Perhaps the markets aren’t convinced by their hawkish tone. Or maybe, the fact that the Chinese central bank reduced the cost of borrowing overnight has calmed Aussie traders. The GBP/AUD rate is fairly static at AUD 1.9265.

Canadian Inflation forecast to have ticked lower

The Sterling/Canadian dollar rate has traded in a very narrow range around CAD 1.70 over the last week. We may see a little more volatility this afternoon when Canada releases its consumer price inflation data. If the forecasters have done their sums right, this should show a slight reduction in the headline rate of inflation from 3.4% to 3.3%. There is nothing substantial about that but we will see the Canadian dollar shifted, if the data comes in significantly below that level. Right now the GBP/CAD rate is spot on CAD 1.70.