At the time of writing, GBP/AUD was trading around AU$1.9161, up approximately 0.5% on the day.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.920489 (-0.01%)
Pound to Dollar (GBP/USD): 1.335415 (-0.10%)
DAILY RECAP:
The Australian Dollar (AUD) tumbled through Wednesday's Asian session after Australia's latest inflation figures came in below expectations.
Official data showed annual consumer price inflation slowed to 3.9% in the second quarter, below forecasts that it would remain at 4.1%.
The weaker inflation reading prompted investors to further reduce expectations for additional Reserve Bank of Australia (RBA) policy tightening.
The ‘Aussie’ fell sharply as markets cut the implied probability of an August interest rate hike to the low single digits, with several major banks abandoning forecasts for near-term tightening.
Meanwhile, while the Pound (GBP) strengthened against the Australian Dollar, it traded in a relatively narrow range against most other major currencies as investors awaited Thursday's Bank of England (BoE) interest rate decision.
No policy changes are expected, leaving markets focused on the Bank's accompanying statement and any guidance from Governor Andrew Bailey.
Investors remain divided over whether the BoE could still raise interest rates later this year or instead keep policy unchanged before eventually resuming its easing cycle.
Near-Term GBP/AUD Forecast: Dovish BoE to Sink Sterling? Looking ahead, Thursday's Bank of England interest rate decision is expected to be the main driver of the Pound to Australian Dollar exchange rate.
If the BoE adopts a more dovish tone, Sterling could surrender much of Wednesday's gains and potentially retest recent lows against the Australian Dollar.
However, if policymakers warn that inflation risks are building again during the second half of 2026, expectations for another interest rate hike could strengthen and provide additional support for the Pound.
Meanwhile, any renewed escalation of tensions in the Middle East could continue to weigh on the risk-sensitive Australian Dollar through the second half of the week.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.