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GBP to AUD Forecasts

The effects of the coronavirus pandemic plus success or failure of post Brexit negotiations will dominate GBP to AUD trends and forecasts in 2020.

British Pound Sterling to Australian dollar bank forecasts

NAB have revised upwards their pound sterling forecasts now expecting the GBP/USD rate to be at US$1.47 by June 2022, up from their previous forecast of US$1.39. For 2020, it sees GBP at US$1.36 by year-end, up from a predicted US$1.30.

The pound was the worst performer of the major currencies in September. In late September, the currency saw some gains off the back of optimistic Brexit talks and comments from the Bank of England that negative interest rates, despite being in the toolbox, were not appropriate. The currency remains vulnerable to volatility driven by fears unemployment levels will rise when the current furlough scheme ends in October and the increasing likelihood of further lockdowns in a bid to combat the second wave in infections. The EU and UK look to resolve a trade deal by the end of October. Only weeks remain to allow the new laws to go through both the UK and EU Parliaments before December 31. The shorter this time frame the more volatility can be expected. Watch for any positive or negative headlines around negotiations which could trigger volatility. — In September, after breaking 0.74 US cents, the AUD fell against most of the major currencies. The potential second wave of COVID-19 is dampening expectations for global growth and US election uncertainty is driving risk-off sentiment, which does not benefit the AUD. While the focus remains with the underlying risk narrative a shift in key economic data sets is also weighing on the currency. Recent Consumer Price Index data came in below market expectations and the domestic growth outlook has flattened following Victoria’s second wave lockdown, raising expectations monetary policy will ease before the end of the year. Should the RBA cut rates and the market appetite for risk continue to sour, the AUD could be trading between 0.68 and 0.70 US cents in the short-term.

Australia and the United Kingdom signed a free trade agreement in June 2020, which will make whisky and wine cheaper in both countries and reduce tariffs on speciality foods, also easing travel and work restrictions.

 

GBPAUD Trend & Alerts

GBPAUD at 1.8274 is a little above its 90-DAY average, range 1.7564-1.8472.
🔔 GBPAUD is DOWN 0.6% TODAY.
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Alert:1-DAY0.6% |

Note that forecasts and predictions for the GBP/AUD exchange rate change all the time, affected by news events and relative sentiment towards the Australian and UK economies and this exchange rate is even more volatile than usual because of the uncertainties around Brexit.

You can read more about GBP cross-rate forecasts here GBP Trends and Forecasts for 2020.

What is a good AUD to GBP exchange rate?

This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate's relative value is to look at the rate's history.

The following table looks at the change in the GBP to AUD exchange rate to the present day for periods going back upto 10 years:

 
GBP/AUD rateChangePeriod
16 Oct 2020 : 1.82390.2% ▲1 Week
23 Sep 2020 : 1.79971.5% ▲30 Days
25 Jul 2020 : 1.80041.5% ▲90 Days
24 Oct 2019 : 1.88363% ▼1 Year
25 Oct 2015 : 2.121813.9% ▼5 Years
26 Oct 2010 : 1.609213.5% ▲10 Years

GBP/AUD 10 year historic rates & change to 23-Oct-2020 : 1.8270

 

Australian Dollar in the markets

The bleak outlook in the US has added downward pressure on the world’s base currency and helped consolidate the Aussie dollars’ upturn. Although the Australian dollar has recently edged through the key 0.72 handle, a sustained move above this level has been hard to come by.

Further uncertainty in the US could push the AUD through 0.72 US cents.

In the second quarter of 2020 AUD staged a rapid recovery through the months of April, May and into June up 25% from its mid-March lows to US70c in early June. This is due more to the perceived benefits to Australia of an awakening post-pandemic Chinese economy than the political-social situtation in the US dpressing the USD.

The Aussie had been savaged in March sliding to US55 cents the lowest since 2003. Growing fears of the coronavirus outbreak moved the market into safer currencies such as the USD and away from AUD, NZD and CAD.

The virus was a double blow to the Aussie after the earlier threat of proxy war between the US and Iran in Iraq had also pared back some of the gains the Aussie had made coming into the New Year.

The Australian dollar had started the new decade strongly climbing to multi-month highs helped along by cooling trade tensions between the United States and China and optimism for global economic growth in the year ahead.

The Aussie broke back over US70 cents on the final day of 2019 — a level not seen since mid year. During December the Australian dollar reversed direction (again) and climbed steadily back up against the US dollar on the back of the strength of the housing market and a market perception that further interest rate cuts were less likely.

 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.