AUD: Outperformance for now against the GBP – Westpac

By FXStreet FXStreet (Delhi) – Sean Callow, Research Analyst at Westpac, suggests that AUD outperformance against the pound seems likely to continue multi-week, despite the near term challenge of breaking AUD/GBP 0.50/ GBP/AUD 2.00.

Key Quotes

“Weak UK inflation pressures are likely to keep the start of the Bank of England tightening cycle sufficiently distant in market pricing to weigh on sterling in comparison to the steady hand we expect from the RBA.”

“Short term risks for AUD centre mostly on China’s sluggish industrial sector and nerves in its FX and equity markets. This could see AUD/GBP test 0.4800/30, GBP/AUD 2.07. But with AUD enjoying underlying demand from M&A, commercial property etc and iron ore prices finally looking more range-bound, we see scope for AUD outperformance as far as 0.5175/0.5200, GBP/AUD 1.93 multi-week.”
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Source:: FX Street