Australian dollar holds its ground against the pound

The Australian dollar managed to hold its ground against sterling yesterday, despite the pound receiving support from stronger than expected data from the UK.

• The pound climbed back up past the A$2 level yesterday, following the release of better than expected production figures and retail sales data.
  
• However, the early release of employment figures in the afternoon dampened sterling’s gains, pushing the pound below A$2 again after the figures showed the ILO unemployment rate rose to 7.1 percent, from 6.7 percent the previous month.
  
• Reaction to the Australian Federal budget remained muted, as its economic projections and forecast deficit was within analysts’ expectations. Investors will focus on the BoE today, with the release of their inflationary report due, along with a speech by Governor Mervyn King.