GBP/AUD Outlook:
Bearish, as the rate is below its recent average and near recent lows due to political uncertainty in the UK and pressure on the Australian dollar.
Key drivers:
• Rate gap: The Bank of England's recent dovish policy contrasts with the Reserve Bank of Australia's recent rate hike, which supports the AUD.
• Risk/commodities: Oil prices are trending near average, affecting broader market risk dynamics, which can impact the AUD negatively if confidence wavers.
• One macro factor: Ongoing political jitters in the UK create hesitation among GBP investors, limiting potential upward movement for the pound.
Range:
The GBP/AUD is likely to hold within its recent range, influenced by mixed economic signals from both countries.
What could change it:
• Upside risk: A surprising improvement in UK economic data could boost the GBP.
• Downside risk: Continued declines in Australian consumer confidence could further weaken the AUD, impacting the pair.
