All Eyes on GBP Ahead of BOE and Aussie Following Trade Balance Data Release

GBP and Aussie traders get some impetus on Thursday ahead of BOE and following Trade Balance data release in Australia. While in Europe, Governor Carney is expected to come forward today at 12:30pm GMT and announce the Bank of England’s decision regarding inflation and/or any rate hikes, in Australia the market reacted to optimistic trade balance data release.

GBP in Spotlight

Anticipating BOE’s release, investors will potentially see some improvement in the risk reversal pressuring GBPUSD today. This points to a lowering demand for GBP puts. Vols dropped below the one month lows.

On Wednesday, the cable reached a close level at 1.32800 and today seems to be revolving around 1.32799. GBPUSD traders may need to keep an eye on the resistance and support levels that the pair hit this morning.

The improvement in risk reversals from -0.85 to -0.25 may also be indicative of a milder demand for GBP puts ahead of BOE’s decision and Governor Carney’s speech.

Although economists anticipate that he will announce that British policymakers are not keen on jumping interest rates in the near future, the Sterling is still exposed to volatility hovering around 7.67, the lowest level since September.

Aussie Following Trade Balance Data Release

Across the Pacific, in Australia, the Trade Balance came in with romping data that beat economists’s expectations. While the Aussie gained substantially on the news, domestic demand remains a matter of concern for many.

AUD started the day strongly bid, reflecting the market’s shredding sentiment about economic data.

Australia’s trade surplus in September exceeded economists’ forecast of A$1.2 billion, coming in at A$1.74 billion (US$1.3 billion). Exports gained 3% on the month, while imports added only a feeble 0.5%.

Building permit levels rose 1.5% from August, beating the 1% drop consensus.

These enchanting figures boosted AUDUSD, indicating that certain parts of the Australian economy are extremely solid. Despite the positive outlook, wages and prices remain subdued, which may indicate that Thursday’s data release is less likely to influence the interest rate prognostication.

AUDUSD traded this morning around 0.77138. Aussie traders might need to keep in mind the resistance and support levels of the pair for the day.