14 SEPTEMBER 2017 BY FC EXCHANGE | SHARE
The pound to Australian dollar (GBP/AUD) and pound to New Zealand dollar (GBP/NZD) exchange rates jumped in Thursday's European session say industry experts FC Exchange.
The Aussie and the Kiwi dollars took a hammering against the pound (GBP/AUD, GBP/NZD) on Thursday following the release of the latest Bank of England (BoE) meeting minutes.
The minutes saw the central bank take on a considerably more hawkish stance, which laid the ground for higher rates in the near future. In the afternoon of Thursday’s European session the GBP/AUD exchange rate was trending around 1.29% higher at 1.6759, while the GBP/NZD exchange rate resided at around 1.8556, a massive 1.89% higher.
Speculation that the BoE would hike rates in November allowed sterling to reach a fresh one-year high against the US dollar, recovering around half of its losses since the Brexit referednum.
However, not everyone is so positive about the prospect of higher rates, with some industry experts suggesting that the Bank of England has waited too long already.
Economic expert Andrew Sentance commented: ‘The challenge facing the MPC [Monetary Policy Committee] is to deliver a gradual increase in interest rates which can be absorbed by the economy. By continually delaying the first move in this direction, there is an increasing risk that when interest rates do start to rise, it will take consumers and borrowers by surprise – and therefore crate a bigger shock to the economy than it needs to be.’
Also this week UK inflation jumped to 2.9%, while unemployment fell to a fresh 42-year low.
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