GBP/AUD slips to 1-month low as BoE policy decision looms

The GBP/AUD currency pair registered a fresh 1-month low on Thursday ahead of the Bank of England’s monetary policy decision later in the day.

The central bank is largely expected to leave its policy interest rate at a 15-year high of 5.25% at its November meeting.

The BoE has delivered 13 rate increases over the course of nearly two years in an attempt to curb persistent inflation.

Still, markets have not fully priced a rate cut until September 2024.

“Pricing is reflecting the view that BoE rates will have to remain on ‘Table Mountain’ for some months given the UK’s inflation risks,” RaboBank Forex strategist Jane Foley was quoted as saying by Reuters.

Meanwhile, the risk-sensitive Aussie Dollar gained 0.8% on Wednesday and another 0.3% on Thursday against the Sterling on signs that US interest rates have likely peaked after the Federal Reserve left its funds rate target without change at a 22-year high of 5.25%-5.50%.

On the macroeconomic front, data showed on Thursday that Australia’s trade surplus on goods had shrunk to a 30-month low of AUD 6.79 billion in September from a revised up AUD 10.16 billion surplus in August.

Total exports decreased 1.4% month-over-month to AUD 45.62 billion in September, dragged down by lower shipments of non-monetary gold.

Total imports surged 7.5% month-over-month to a record high of AUD 38.84 billion, mostly driven by purchases of industrial transport equipment.

As of 7:56 GMT on Thursday GBP/AUD was edging down 0.33% to trade at 1.8943. Earlier in the session, the minor Forex pair went down as low as 1.8930. The latter has been the pair’s weakest level since October 2nd (1.8920).