The Australian dollar and British pound were in the spotlight yesterday, as expectations that interest rates in the two countries will rise again early next month fuelled interest in the currencies.
Spot rates were pricing in another 25-basis-point rise in key lending rates despite an increase in the benchmark borrowing rate in Britain and Australia earlier this month, said Owen Mak of Delta Asia Financial Group.
The expectation of higher rates has led investors to switch out of other currencies such as the US and Hong Kong dollars, which offer lower returns.
Investors could also benefit from the potential appreciation of the aussie and pound against the greenback as the United States Federal Reserve has vowed to keep rates low.
The aussie settled at 72.3 US cents yesterday against 72.14 last Friday, and off last Tuesday's high of 72.45 in Hong Kong trade.
The pound was at $1.6959 in early afternoon trade in Europe yesterday. It finished Friday's New York session at $1.7032.
