Pound Sterling is forecast to maintain a trend of depreciation against the Australian Dollar over the coming days, and potentially weeks, according to the latest technical studies of the GBP/AUD market and observations of the fundamentals currently driving both currencies.
Pound Sterling is being tipped to fall against the Australian Dollar over coming days and weeks by strategists at Nomura, the global investment bank, who see a combination of pro-risk markets and Australia's early exit from lockdown as being two justifications for the stance.
The Australian Dollar outperformed again on Thursday as strong March trade surplusses, a Reserve Bank of Australia (RBA) curtailment of quantitative easing and fresh trade related talks between the U.S. and China cheered the market and drove a rally in risk assets.
Pound Sterling is trading lower against the Australian Dollar in the mid-week session as a short-term trend of depreciation extends courtesy of increased confidence in global investor sentiment and firming commodity prices, both of which tend to favour the Australian currency over its British counterpart.
The Australian Dollar looks like topped out on the charts after a strong eight percent rally through April, technical analysts say, at a point when a fresh bout of tensions between the U.S. and China risks weighing on the antipodean unit and furthering a corrective Pound-Australian Dollar rate rebound.
The Reserve Bank of Australia today warned of a sharp slump of 10% in Australian GDP in the first half of 2020, but foreign exchange strategists say the country is nevertheless well positioned to ride the slump when compared with its peers, and this could ultimately underpin the Australian Dollar for the foreseeable future.
Pound Sterling starts the new week softer against the Australian Dollar and technical studies suggest further short-term losses are likely, however we are wary of betting against GBP/AUD noting that seasonality tends to favour Sterling over its Australian counterpart in May.
The Pound-Australian Dollar rate was in recovery mode Friday and is tipped by Westpac to climb further in weeks ahead following a punishing April month, with much of that decline now likely to be retraced, although the levels produced in this correction higher could be the best available to Aussie Dollar buyers for a while to come.