AUD to GBP trades higher for the second consecutive day after the Bank of England decision came as was expected by markets. The pair reversed early losses after the announcement of the BOE decision. Bank of England (BOE) kept the interest rates unchanged at 0.10% a record low level. The QE increased by £100 billion, matching most of the expectations bringing the total up to 745 billion.
The positive development is that calmer interest rate markets have given BOE the confidence to reduce the pace of purchases, as the new 100 billion injections will be used to buy gilts and will be completed by December of 2020.
Eight of the nine Monetary Policy Committee members voted in favour of the extension of the QE with the BOE chief economist Andy Haldane the only member to vote against. Andy Haldane said that the recovery was happening sooner and faster than had been forecasted in May.
BOE said that recent data suggest the recession will not be as severe as initially thought but warned of higher and more persistent unemployment.
Earlier today reported that the Australian employment in May drop by 227k with the unemployment rate up to 7.1% the highest level since October 2001. Analysts expectations were for 79k jobs lost and the unemployment rate at 6.9%. Both full-time and part-time employment drop. The Participation Rate dropped to 62.9% below the expectations of 63.7%.
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AUD to GBP Analysis After the BOE Decision
AUD to GBP is 0.57% higher at 0.5513 at the daily high as British pound selling pressure accelerates after the BOE decision. The pair makes eight days high as the bulls are in clear control of the pair. The technical picture is positive for AUDGBP pair, and higher levels are on the cards.
On the upside, the initial resistance for AUDGBP is at 0.5515 the daily high. Next hurdle for AUD to GBP will be met at 0.5538 the high from June 3. A break above would challenge the highs from September 13, 2019, at 0.5568.
On the flipside, immediate support stands at 0.5458 the daily low. A move below would open the way for a test of the June 16 low at 0.5439. If sellers break that level the next support will be met at 0.5419, the low from June 12.
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