Market Update – 2nd November 2017 – UK Interest Rate Decision Tonight Could See Big AUD/GBP Swings

Data released overnight included U.S preliminary jobs numbers, otherwise known as ADP Employment and the data was pretty impressive once again with about 235K new jobs created; however we did also see a revision to the downside for the previous months reading which probably offset any further USD gains we’d have normally expected from such a bumper result. In fact AUD is actually up across the board on very bullish signs out of the metals/commodities space overnight. Nickel, a key component in electric vehicle batteries surged towards US$13,000 a tonne, while iron ore, copper and zinc also made solid gains.

We have a truck load of economic data out today with local trade balance figures and building approvals at 11.30am. This is followed by U.K economic data in Construction PMI at 6.30pm and then the official bank rate vote, or interest rate decision out of the Bank of England. Expectations are that’ll we see a lift in interest rates from the BOE to 0.5% from 0.25% on the back of strong economic growth and rising inflation. How much of this is priced into AUD/GBP is unknown, so expect a fair bit of volatility and some potential big moves in AUD/GBP tonight around 11.00pm.

Those with GBP exposures may wish to book ahead of the announcement.

AUD EXCHANGE RATES:

AUD/USD – 0.7674

AUD/GBP – 0.5792

AUD/EUR – 0.6601

AUD/NZD – 1.1135

AUD/JPY – 87.598

COMMODITIES: 

Gold – A$1660/oz

Silver –  A$22.31/oz

WTI – US$54.36/barrel

DATA RELEASES TODAY:

AUD – Trade Balance Figure at 11.30am

AUD – Building Approvals at 11.30am

GBP – Construction PMI at 8.30pm

GBP – Official Bank Rate (Interest Rate Decision) at 11.00pm