GBP/AUD pushed higher again today, extending its rebound from 2.0420 as Sterling found fresh support from hotter-than-expected UK inflation. The data have raised fresh doubts over whether BoE can cut again in November, shifting the near-term balance toward hawkish caution.
The backdrop is significant: BoE’s most recent 25bps cut to 4.00% was already a hawkishly split 5–4 decision. Today’s inflation release strengthens the case of hawks such as Chief Economist Huw Pill, potentially swaying some of the less dovish members of the MPC. While the staunchest doves like Alan Taylor may remain unmoved, the prospect of additional cuts is now less certain.
On the other side of the cross, the Australian Dollar is undermined by a mild risk-off tone in global markets. A bruising session for technology stocks yesterday saw the NASDAQ fall sharply, denting sentiment and prompting a rotation out of higher-beta sectors. Caution extended into Asia today, where the Nikkei posted a steep pullback.
Technically, outlook is unchanged that GBP/AUD’s correction from 2.1643 should have completed with three waves down to 2.0420. Firm break of 2.1034 resistance will solidify this bullish case and target a retest on 2.1643 high first. For now, outlook will stay cautiously bullish as long as 2.0775 support holds, in case of retreat.
