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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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