The Australian Dollar will probably not hold onto its post-election gains as the old problems which shaped the previously bearish outlook remain, says Andrew Watrous, an analyst at Morgan Stanley, who retains a bearish outlook for the currency.
Pound Sterling is likely to rise by more than five percent against the Australian Dollar before year-end and losses in a 'no deal' Brexit scenario might be limited to less than four percent, according to forecasts from Capital Economics.
The Aussie Dollar slumped during the overnight session and into Tuesday after the Reserve Bank of Australia suggested strongly that an interest rate cut is now imminent, which has helped to put a floor under the Pound-to-Australian-Dollar rate after a week of steep losses.
The Australian Dollar was riding high at the top of the G10 league table Monday following a surprise win for the coalition government in Sunday's general election, although analysts are saying that gains for the Antipodean currency could prove short-lived.
The Australian Dollar ceded further ground to major rivals Friday as the China-sensitive currency followed the Renmimbi lower, but this hasn't stopped two major European banks from coming off the sidelines as buyers or with bullish forecasts, even as domestic lenders warn of more pain around the corner.
The Australian Dollar was on its back foot in a risk averse market Thursday after April's jobs and unemployment figures gave what some say could provide a green light for the Reserve Bank of Australia (RBA) to cut its interest rate as soon as June.