In 2019 the AUD/GBP rate is in a tug of war between Brexit and the US/China trade war causing much volatility for the Aussie to pound exchange rate.
Australian dollar to British pound sterling bank forecasts
The Aussie has gained a few percent against the pound since Boris Johnson became Britain’s next Prime Minister having increased perceived no-deal risks.
Then in early August the Australian dollar sunk to a 10 year low of 67¢ (Aug-7) to the US dollar. This was due to the RBA twice cutting interest rates plus the offshore yuan breaking the symbolic and closely watched USD/CNY = 7.0 exchange rate, after the trade war flared up again and the US labelled China a “currency manipulator”.
The end result of this trade war is more negative for AUD than GBP so the AUD/GBP rate changed course on its previously Brexit driven direction and dropped back down through the 0.56 level on Aug-7.
It could be that AUD/GBP is significantly overvalued at present. In May, both ING and Goldman Sachs said that no-deal Brexit probabilities were very low — between 15 and 20 percent — and suggested we ignore media narratives to the contrary. This means that if Brexit clarity emerges between now and year-end, the strengthening pound could drag AUD/GBP down by 8-10 percent.
In the unlikely event that no-deal comes to pass, AUD/GBP will see rates near £0.6 based on implied forecasts from HSBC. If Brexit is cancelled or if Britain strikes a good deal with the EU, rates could plummet to £0.45.
You can read more about AUD cross-rate forecasts here AUD Trends and Forecasts for 2019.
Note that forecasts and predictions for the AUD/GBP 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.