The GBP/AUD currency pair retreated to an intraday low of 1.9395 on Wednesday, pulling back from yesterday’s 5-month high, after UK’s consumer price inflation did not pick up in January as expected.
Annual CPI inflation remained steady at 4.0% in January, while being close to November’s two-year low of 3.9%. In comparison, market consensus had pointed to an acceleration to 4.2%.
Yet, the rate remained well above the Bank of England’s inflation objective of 2%.
In January, inflation slowed sharply for both furniture and household goods (0.4% year-on-year versus 2.5% year-on-year in December) and food & non-alcoholic beverages (6.9% YoY versus 8.0% YoY in December).
Last month, inflation accelerated only for miscellaneous goods and services (4.5% YoY versus 4.3% YoY in December).
Meanwhile, UK’s annual core CPI inflation, which excludes volatile categories such as food and energy, also remained steady at 5.1% in January, again defying expectations of an increase to 5.2%.
The data took some of the pressure off the Bank of England to maintain interest rates at current levels for longer.
In other macro data, Aussie traders are now expecting Australia’s employment figures for January, due out on Thursday.
As of 7:51 GMT on Wednesday the GBP/AUD currency pair was losing 0.51% to trade at 1.9403. Yesterday the minor Forex pair went up as high as 1.9529. The latter has been the pair’s strongest level since September 11th 2023 (1.9544).
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