By Rob Samson

RBA minutes were released overnight. The Aus dollar (AUD) gapped higher vs the US dollar following the announcement from 0.9030 to 0.9080 but has since fallen and has dipped below pre RBA minutes levels.

The pound sterling vs Australian dollar exchange rate (GBP/AUD) is 0.02 pct lower on a daily basis at 1.8505.

The pound sterling vs New Zealand dollar (GBP/NZD) exchange rate is 0.66 pct higher at 2.0116.

(Note: All AUD, NZD quotes here refer to the wholesale spot market. Your bank will charge a spread at their discretion when passing on a retail rate. However, an independent FX provider is so well placed on the market that they are able to deliver you up to 5% more currency. Please learn more here.)

"It’s been a volatile overnight session for the Australian dollar as the key points emerging from the minutes were that the RBA were admittedly puzzled by recent inflation levels, that a lower AUD would support the expansion of the economy and that interest policy would likely remain stable for now," notes Ipek Ozkardeskaya at Swissquote Bank.

Pound sterling vs Australian dollar

The RBA minutes were in line with what we already know about the RBA’s stance. The central bank maintained the view that stable interest rates are the best course of action for now, and noted some improvement in the economy.

"There has not been too much reaction on the back of the RBA minutes and this has kept the pound more stable vs the Aussie. Sterling, however, remains vulnerable and so we expect some weakness ahead," says Sasha Nugent at Caxton FX.

Shaun Osborne at TD Securities reckons, "February’s policy meeting delivered a positive assessment of the local and international outlook and made no mention of the AUD, a positive combination for the currency which has failed to ignite much interest so far today."

Pound sterling vs New Zealand dollar

The pound is putting up a better performance against the NZ Dollar which remains a little vulnerable. Today's UK inflation figures, however, have reversed some early gains, and sterling’s resilience seems to be wearing off.

"We expect the pound will continue to weaken over the course of the day and we could see trading below 2.00," says Nugent.

Pound sterling exchange rate complex at elevated levels

The British pound has sunk back today, extending yesterday's losses.

Despite being in pullback mode it is worth remembering the UK currency is still at elevated levels.

GBP reached the strongest level in four years against the USD yesterday, after an industry report showed house prices increased this month.

Sterling fell versus the EUR before inflation, unemployment and retail sales data due this week.

GBP rose 2.1% versus the USD last week (the steepest gain since June) as signs the recovery is gaining momentum stoked bets the central bank will raise interest rates sooner than it projected.

Mark Carney revised his forward-guidance policy on rates in the Inflation Report released last week. Further, U.K. government bonds were little changed.

Sterling has appreciated 11% in the past year, making it the best performer among the 10 developed-nation currencies. The EUR rose 5.5% and the USD advanced 2.5%.

Last week Carney replaced an unemployment threshold in his forward guidance policy with a range of indicators, including spare capacity, as the means of assessing when the central bank might increase interest rates. Policy makers also raised their growth forecasts for the U.K. in the Inflation Report.