The GBP to AUD exchange rate currently leans bearish as the market anticipates interest rate cuts from the Bank of England (BoE) in 2026. Interest rate differentials are expected to favor the Australian dollar as the Reserve Bank of Australia (RBA) may raise rates amid rising inflation, contrasting with the BoE’s easing outlook.
Risk sentiment is also shaping views, with the UK facing fiscal concerns that could further pressure the pound, while Australia shows a stable outlook for growth despite recent security incidents. Additionally, the UK’s manufacturing activity registered at 50.6, which is neutral but may not sufficiently support the pound against the AUD.
The near-term trading range for GBP/AUD is likely to remain stable as it has traded within a 3.4% band recently. A potential upside risk could arise from better-than-expected UK economic data, whereas a downside risk would be exacerbated by further monetary easing from the BoE, strengthening the AUD.