AUD/GBP Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Reserve Bank of Australia's potential rate hikes create upward pressure on the AUD compared to the Bank of England's cautious approach to rate reductions.
- Risk/commodities: The AUD benefits from high metals prices, counteracting some risk from geopolitical tensions affecting global trade.
- One macro factor: China's uneven economic recovery continues to dampen demand for Australian exports, impacting the AUD negatively.
Range: The AUD/GBP is likely to hold within its recent range, showing stability without significant upward or downward momentum.
What could change it:
- Upside risk: A stronger-than-expected employment report from Australia could boost the AUD further.
- Downside risk: If UK economic growth projections worsen significantly, it could negatively impact the GBP, leading to increased volatility in the pair.