The current market bias for the AUD to GBP exchange rate is cautiously bullish.
Key drivers include the interest rate differential, as the Reserve Bank of Australia is expected to raise rates amid rising inflation, while the Bank of England plans to cut rates to stimulate growth. Concerns over the UK’s fiscal policy, particularly following the reversal on income tax plans, suggest downward pressure on the GBP. Additionally, Australia's strong commodity sector may support the AUD if demand persists.
The expected trading range for AUD/GBP in the near term is likely to remain stable, reflecting the recent highs nearing 0.4996 and generally fluctuating within a 3.5% range.
An upside risk could emerge from unexpected strong economic data from Australia or further global commodity demand shocks that support the AUD. Conversely, a downside risk might be increased caution from investors as the UK economy slows, impacting GBP stability.