The AUD/GBP pair shows a bullish-to-range-bound bias, as the current level is slightly above the 90-day average and within the upper half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of Australia is considering rate hikes, while the Bank of England is adopting a cautious approach to future cuts, which could support the AUD.
- Risk/commodities: The AUD may be impacted by ongoing volatility in oil prices, affecting commodity exports and overall demand for the currency.
- One macro factor: Recent Chinese inflation figures revealed weaker-than-expected growth, raising concerns about demand for Australian exports.
Range: The pair is likely to hold within its recent 3-month range, with a possibility of slight drift due to external factors.
What could change it:
- Upside risk: Stronger-than-expected economic data from Australia could boost the AUD.
- Downside risk: Continued weakness in Chinese economic performance could further pressure the AUD.