The current market bias for the AUD to GBP exchange rate is range-bound.
The Reserve Bank of Australia plans to raise interest rates as inflation exceeds target levels, which could support the AUD in the near term. In contrast, the Bank of England is expected to cut rates due to slowing inflation and growth forecasts, placing downward pressure on the GBP. Additionally, the UK faces fiscal concerns following policy reversals, further contributing to uncertainty around the pound.
Over the next few months, the AUD/GBP is likely to trade within a narrow range, reflecting recent stability. Upside risks include stronger-than-expected Australian economic data, which could bolster the AUD. Conversely, any unexpected dovish (supportive of lower interest rates) signals from the RBA could weaken the AUD against the GBP, especially if market sentiment wavers.