GBP/AUD Surges as Soft Core Inflation Dents Rate Hike Bets

The pound-to-Australian dollar exchange rate has surged 0.4% to 1.9014 on Wednesday, following soft core inflation data from Australia that eroded bets on another interest rate hike by the Reserve Bank of Australia (RBA).

The trimmed mean CPI rose 0.2% in August, below the 0.3% consensus, keeping the annual rate at 3.6%. This kept pressure off the RBA to raise rates again, despite a 25 basis point hike just last week.

'Soft CPI puts another nail in the coffin of back-to-back hikes and lets AUD rates run again (for now),' said Commonwealth Bank of Australia's rates research team.