GBP/AUD Outlook:
The GBP/AUD exchange rate is likely to decrease as it is trading near 90-day lows and is 4.2% below its three-month average. Ongoing tensions in the UK job market, coupled with geopolitical factors affecting the AUD, add pressure.
Key drivers:
• Rate gap: The Bank of England may maintain higher rates due to persistent inflation, while the Reserve Bank of Australia has a more cautious stance.
• Risk/commodities: Recent global uncertainty is impacting the AUD, despite strong GDP growth as fluctuating market moods can weaken its appeal.
• One macro factor: The latest job cuts in the UK services sector raise concerns about economic stability, impacting GBP.
Range:
GBP/AUD is likely to drift within the established 3-month range from 1.8895 to 2.0258.
What could change it:
• Upside risk: A significant improvement in UK employment data could boost GBP strength.
• Downside risk: Worsening global geopolitical tensions may further weaken the AUD.