AUD/GBP Outlook:
The AUD/GBP is slightly positive but likely to move sideways as it trades above its recent average. The rate is currently about 4% higher than the three-month average and is positioned in the mid-range, lacking a clear driver for further movement.
Key drivers:
• Rate gap: The Reserve Bank of Australia (RBA) has a different approach compared to the Bank of England (BoE), which has reduced expectations for rate cuts due to rising inflation.
• Risk/commodities: Increased global oil prices could benefit Australian exporters but current market risks are creating caution.
• One macro factor: Australian GDP growth forecasts for the fourth quarter may positively influence the AUD if expectations materialize.
Range:
Expect the AUD/GBP to test extremes within the 3-month range as it has fluctuated between 0.4936 and 0.5289.
What could change it:
• Upside risk: Positive GDP data in Australia could strengthen the AUD.
• Downside risk: A surprise acceleration in UK service activity could boost the GBP and create downward pressure on the AUD.