Sterling has had a good year so far, though its outperformance in the G10 was very much in Q1 (#2) rather than Q2 (#8). Looking ahead, in the view of economists at Westpac, the Australian dollar is set to find support on dips en route to GBP/AUD 1.78-1.79 end-June and 1.75 end-September.
Recent trends and near-term outlook
“Our baseline view on GBP/AUD is for the pair trend down towards 1.78-1.79 end-June and 1.75 end-September.”
“We continue to see scope for the Aussie to gain on most crosses, as Australia’s export basket will find substantial support from a synchronised global rebound in H2 2021.”
“The aussie should outperform the pound if global risk appetite improves in coming months, which seems likely given central bank policy settings. However, near term GBP/AUD could print fresh highs since November 2020, given Australia’s high profile tensions with China and the flare-up of COVID-19 cases in other key Asian trading partners which are prompting new activity restrictions and popping planned travel bubbles, in contrast to Europe’s increasingly promising summer travel season.”
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