AUD/GBP Outlook:
Likely to increase, as the Australian dollar is trading above its recent average and is near recent highs, supported by strong commodity demand.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent rate hike strengthens the AUD relative to the Bank of England's steady rate, which suggests less upward movement in GBP.
• Risk/commodities: Ongoing strength in commodities, bolstered by China's economic policy, continues to support the Australian dollar.
• One macro factor: The recent drop in UK consumer confidence is increasing uncertainty around the British economy, putting further pressure on the GBP.
Range:
Expect AUD/GBP to hold its current position, testing the upper end of its recent range.
What could change it:
• An unexpected UK economic rebound could lead to a stronger GBP.
• Any further rate hikes from the RBA could push the AUD even higher.
