RBA setting the hawkish tone?

Yesterday's currency recap

USD gains picked up yesterday with markets easing rate cut expectations in 2026 by 5bps on anticipation that the Fed could conduct a hawkish rate cut in their meeting on Wednesday. Global government bonds fell on Monday and perhaps we are near the end of a global rate cutting cycle following comments made by ECB Schnabel that she would be comfortable with the next ECB move being rate hike.

Today's GBP rates

Key data points

What we think

The RBA held rates, as widely expected. Members were hawkish, setting the stall that perhaps rate hikes could be on the cards next. RBA governor commented "Market is right that the Board is thinking about upside risks... the question is whether we see an extended pause or further rate hikes." As a result, AUD is holding onto its gains, with GBPAUD once again near the October/November lows. The BRC revealed that retail sales in the UK increased just 1.4% in November, below the 12-month average and at the weakest pace since May.

For the rest of the day, we look forward to October’s JOLTS numbers and we have BoE rate setters addressing parliament in the afternoon.

We specialise in currency guidance

Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.

Have a great day.