AUD/GBP Outlook: The outlook is likely to increase, with the Australian dollar trading 2.1% above its recent average and at 90-day highs, supported by strong domestic economic data.
Key drivers:
• Rate gap: The Reserve Bank of Australia is showing signs of potential rate hikes, while the Bank of England remains cautious with its monetary policy, favoring the AUD.
• Risk/commodities: High metals prices, driven by demand from China, are enhancing the appeal of the Australian dollar.
• One macro factor: The recent Australian jobs report significantly outperformed expectations, reducing unemployment, which supports the AUD.
Range: The AUD/GBP is likely to test extremes within its recent stable range, potentially maintaining upward momentum.
What could change it:
• Upside risk: A further unexpected improvement in Australian economic indicators could strengthen the AUD further.
• Downside risk: New tariffs proposed by the US could negatively impact UK economic growth, affecting GBP dynamics.