We have another one of our hugely successful ‘Bank of England’ webinars this Thursday at 14.00 BST. Last month’s predicted the GBP fall to 1.10 and 1.60 against the euro and the dollar respectively; what will we predict on Thursday? Email me at research@worldfirst.com if you need an invitation.

Australia became the first country in the G10 or the OECD to raise their benchmark interest rate last night. In moving the rate to 3.25% from 3%, economists’ thoughts that Australia would weather the economic storm better than most seems to have been well founded.

Data in Australia has been frequently better than expected with consumer confidence and retail spending figures especially surprising to the topside. Governor Stevens said that economic conditions had been “stronger than expected” but that only now had they decided that it was prudent to take the economy off the ‘emergency rate’ of 3%. The Aussies have beaten us at most things and now they’ve beaten us at this.

Naturally this move has seen AUD strengthen overnight with AUDUSD at 0.8860, AUDJPY hitting 79.17 and GBPAUD moving to 1.8029.

News closer to home was fairly dull by comparison. UK services PMI was better than expected however really was unable to help sterling at all as it deflated against the euro and dollar over the course of the trading session. Most investors will be waiting until the end of the week so they are able to factor in the Bank of England and European Central Bank’s decisions before making their trading decisions.

Data today comes in the form of both industrial and manufacturing production from the UK.

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