The Pound to Australian Dollar (GBP/AUD) exchange rate fell to a near one-month low on Thursday after stronger-than-expected Australian employment figures boosted the ‘Aussie’.
At the time of writing, GBP/AUD was trading around AU$1.9091, having recovered from an intraday low of approximately AU$1.9066.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.911595 (-0.12%)
Pound to Dollar (GBP/USD): 1.332 (-0.41%)
DAILY RECAP:
The Australian Dollar (AUD) strengthened during Thursday’s Asian trading session following the release of Australia’s latest employment report.
The data showed employment increased by 76,300 in June, comfortably beating forecasts for a rise of 15,000.
The stronger-than-expected labour market reinforced expectations that the Reserve Bank of Australia (RBA) could continue raising interest rates later this year.
However, the risk-sensitive ‘Aussie’ struggled to hold onto all of its gains as a cautious market mood weighed on demand during European trade.
Meanwhile, the Pound (GBP) remained subdued as markets continued to assess Andy Burnham’s first week as Prime Minister.
Sterling had strengthened in the run-up to Burnham entering Downing Street as investors unwound the political risk premium previously built into the currency.
However, the Pound has since trended lower amid ongoing questions over how the government's spending commitments and tax cut pledges will be financed.
This uncertainty continued to limit Sterling on Thursday.
Near-Term GBP/AUD Forecast: PMI Surveys in Focus Looking ahead, Friday's Asian session brings Australia's preliminary PMI surveys.
If private sector activity slowed to near-stagnation in July, as expected, the Australian Dollar could face renewed pressure.
European trading then begins with the UK's June retail sales figures. A forecast 0.3% contraction in sales could weigh on Sterling.
Later in the morning, attention turns to the UK's preliminary PMI surveys, with investors particularly focused on the services reading. Any improvement in business activity could provide the Pound with modest support.
Meanwhile, broader market risk appetite and UK political developments are also likely to influence GBP/AUD trading, potentially leading to increased volatility.
Morgan Stanley expects the Pound to weaken against the Australian Dollar over the coming months, forecasting GBP/AUD will fall to 1.82, as improving sentiment towards Australia contrasts with growing political and fiscal risks in the UK.
The Pound to Australian Dollar exchange rate (GBP/AUD) traded around 1.93 on Monday after rebounding from June lows below 1.90, leaving the pair close to its highest levels of the year despite the bank believing the rally has gone too far.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.917965 (-0.49%)
Pound to Dollar (GBP/USD): 1.345149 (-0.02%)
Australian Dollar to Dollar (AUD/USD): 0.701342 (+0.47%)
Morgan Stanley remains one of the more bearish investment banks on Sterling, arguing that much of the recent optimism surrounding the UK's political outlook has already been priced into the currency.
"We are bearish GBP."
The bank says Sterling rallied after reports that the incoming government could appoint a more fiscally conservative Chancellor than initially feared, but believes investors have already discounted much of that positive news.
"We think the market has priced in the 'good news' from the potential for a more fiscally conservative Chancellor than initial market expectations."
Morgan Stanley adds that there is still little clarity on the new government's economic agenda, while attention is likely to shift towards difficult fiscal decisions ahead of the autumn Budget.
"With so much good news already in the price, we think the hurdle for further upside surprises has moved higher."
In contrast, the bank retains a constructive view on the Australian Dollar. It points to resilient business confidence, attractive carry returns and expectations that Australian front-end yields will remain relatively elevated.
"We remain bullish on AUD."
Morgan Stanley believes steady labour market conditions and relatively hawkish Reserve Bank of Australia expectations should continue to attract investors seeking higher-yielding currencies.
Near-Term GBP/AUD Forecast: Morgan Stanley Expects Sterling to Give Back Recent Gains Reflecting these contrasting outlooks, Morgan Stanley continues to recommend a short GBP/AUD trade.
The bank has a target of 1.82, representing a decline of around 6% from current levels.
"GBP/AUD faces downward pressure from elevated risk appetite and a potential increase in GBP negative risk premium."
Morgan Stanley believes the combination of stronger Australian fundamentals and rising UK fiscal uncertainty should allow the Australian Dollar to outperform Sterling over the coming months, particularly if global risk sentiment remains supportive.
The Pound to Australian Dollar (GBP/AUD) exchange rate traded in a wide range last week, briefly falling to a two-week low before recovering to test fresh multi-month highs amid UK Chancellor speculation.
At the time of writing, GBP/AUD was trading at AU$1.9262, virtually unchanged on the week after retreating from a high of AU$1.9350.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.927315 (+0.11%)
Pound to Dollar (GBP/USD): 1.345377 (-0.17%)
Australian Dollar to Dollar (AUD/USD): 0.698058 (-0.28%)
DAILY RECAP:
The Pound (GBP) got off to a subdued start last week, as a quiet UK economic calendar left investors with few fresh domestic catalysts.
Sterling sentiment was also suppressed by cautious remarks from Bank of England Governor Andrew Bailey, who reiterated the bank's policy remains data dependent.
The Pound’s fortunes then improved markedly in mid-week trade amid reports that incoming Prime Minister Andy Burnham might be looking to appoint Shabana Mahmood as his Chancellor over Ed Miliband, with the former being viewed by markets as more fiscally conservative.
However, the jump in Sterling proved short-lived, with the currency succumbing to subsequent profit-taking, which overshadowed a rebound in UK GDP in May.
Meanwhile, trade in the Australian Dollar (AUD) was mixed last week, with the resumption of hostilities in the Gulf driving volatility in the currency throughout the session.
Demand for the risk-sensitive ‘Aussie’ was also knocked later in the session as a global tech stock selloff spooked markets.
On a more positive front was the release of Australia's latest consumer and business confidence surveys, which both reported an improvement in morale.
Near-Term GBP/AUD Forecast: Burnham's First Moves as PM in the Spotlight Looking to the week ahead, Andy Burnham's first days in office are likely to act as a key catalyst for the Pound to Australian Dollar exchange rate.
The spotlight will undoubtedly be on who Burnham ultimately appoints as his Chancellor of the Exchequer, with markets likely to favour a more fiscally conservative pick.
At the same time, there is also a glut of high-impact UK economic releases set to influence Sterling this week, with GBP investors particularly focused on how the latest employment and inflation figures could influence Bank of England rate expectations.
Meanwhile, the focus for AUD investors will be on Australia's latest employment data, with the ‘Aussie’ poised to weaken if another weak jobs report tempers Reserve Bank of Australia rate hike bets.
The Pound to Australian Dollar (GBP/AUD) exchange rate briefly climbed to a one-week high on Thursday before easing back as investors locked in profits following Sterling's recent rally.
At the time of writing, GBP/AUD was trading at AU$1.9294, having retreated from an earlier high of AU$1.9353.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.926352 (-0.27%)
Pound to Dollar (GBP/USD): 1.347811 (-0.45%)
Australian Dollar to Dollar (AUD/USD): 0.69967 (-0.19%)
DAILY RECAP:
The Australian Dollar (AUD) softened during Thursday’s Asian trading session as markets reacted to new data.
Australian consumer inflation expectations unexpectedly eased from 5.5% in June to 4.7% in July, the lowest reading since January.
The latest figures slightly dampened Reserve Bank of Australia (RBA) interest rate hike expectations, although the impact was limited.
This allowed AUD to recoup some losses as European trade began.
Meanwhile, the Pound (GBP) trended slightly lower on Thursday, with GBP surrendering some of Wednesday’s impressive gains.
Sterling had rallied in the middle of the week following reports that Shabana Mahmood is now the frontrunner for Chancellor in incoming Prime Minister Andy Burnham’s cabinet, rather than Ed Miliband.
Miliband had been the favourite to enter Number 11, but there were concerns among investors that the soft-left MP would pursue less orthodox fiscal policy. Mahmood is seen as more market-friendly, with City figures welcoming reports that she could be Burnham’s choice.
However, the Pound couldn’t sustain its gains into Thursday, even with UK GDP printing as forecast to show a 0.1% recovery in May.
Following Wednesday’s gains, Sterling seemed to suffer some profit-taking.
Near-Term GBP/AUD Forecast: Wider Trends to Drive the Pairing Looking ahead, economic data is thin on the ground for both the Pound and the Australian Dollar on Friday, likely leaving the pairing to trade on wider market trends.
Sterling may draw support as Andy Burnham is formally declared Labour leader, paving the way for him to enter Number 10 on Monday, if investors continue to feel more certain about the future of UK politics.
Meanwhile, market risk dynamics may drive the risk-sensitive ‘Aussie’. Events in the Middle East could be key, although the recent escalation in tensions has had a muted impact on the market mood so far.
The British pound was the standout performer among the major currencies on Wednesday, buoyed by a weaker US dollar and growing optimism over the UK's fiscal outlook. Sterling rallied across the board, lifting GBP/USD to a nine-week high while GBP/AUD rebounded from support to challenge key long-term resistance.
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Source: LSEG
Sterling Surges on Treasury Pick Speculation as GBP/USD and GBP/AUD Rally The British pound surged across the board on Wednesday following reports that incoming UK Prime Minister Andy Burnham is considering Shabana Mahmood for Finance Minister. While Mahmood has little direct economic policy experience, markets view her as a fiscally cautious choice. Her appointment would also reduce the likelihood of Ed Miliband becoming Chancellor, a candidate investors perceive as more likely to increase public spending, boost borrowing and pursue ambitious net-zero spending plans.
British Pound Breaks Higher Against the US Dollar GBP/USD rallied 1.2% to a nine-week high during its strongest session in four months, closing decisively above 1.3500. Sterling also drew support from a weaker US dollar, which fell for a second consecutive session and is now within striking distance of the psychologically important 100 level on the US Dollar Index.
The 1-hour chart shows how explosive the rally was, producing seven consecutive bullish candles during its 146-pip advance without a meaningful pullback. Prices are now consolidating in a tight range above the monthly R1 pivot (1.3521). However, after such a sharp move, the pair may be overstretched, with the RSI (14) in overbought territory, so bulls may want to be on guard for a minor pullback. The daily pivot point sits just below 1.3500, while the 15 June high aligns with the weekly S1 pivot (1.3461), providing a potential support zone.
With the US dollar retracing lower and GBP/USD maintaining its bullish momentum, buyers may be eyeing a move towards the monthly R2 pivot (1.3636), just below the May high.
Source: ICE, TradingView
GBP/AUD Bulls Eye Break Above Key Long-Term Resistance Earlier this week, I was working on the assumption that GBP/AUD could fall. Its three-week rally had been accompanied by waning momentum, while the previous two weekly candles formed long upper wicks, culminating in a shooting star reversal below the 200-day EMA. That view appeared to be playing out on Tuesday as the pair pulled back to its 20-day EMA, although Wednesday's bullish engulfing candle suggests the pullback may already be over.
March High Remains the Key Bullish Hurdle for GBP Bulls With a well-established uptrend and a potential swing low forming around the 12 June high and 20-day EMA, bulls may be preparing for another attempt to break above the 200-day and 200-week EMAs. This paints a bullish near-term picture heading into today's session, although there is also a reasonable chance of a shakeout around 1.9400 given the significance of the long-term moving averages and the March high.
Even so, unless a clear bearish catalyst emerges for the British pound, I suspect GBP bulls will look to buy any dips in anticipation of a bullish breakout above the March high. If they succeed, the 1.9595 high comes into focus for GBP/AUD.
The Pound to Australian Dollar (GBP/AUD) exchange rate edged lower on Tuesday as stronger Australian confidence data and robust Chinese trade figures supported the ‘Aussie’.
At the time of writing, GBP/AUD was trading at AU$1.9254, down around 0.2% on the day.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.9273 (-0.11%)
Pound to Dollar (GBP/USD): 1.338663 (+0.28%)
Australian Dollar to Dollar (AUD/USD): 0.69458 (+0.39%)
DAILY RECAP:
The Australian Dollar (AUD) strengthened on Tuesday, supported by an improvement in domestic sentiment.
Australia’s latest consumer and business confidence indexes outperformed expectations in July and June, respectively.
This improvement was attributed to easing concerns over energy costs, interest rates and the labour market.
At the same time, demand for the ‘Aussie’ was also bolstered by some spectacular trade figures from its largest trading partner, China.
China recorded its second-largest trade surplus on record in June, with markets particularly impressed by the 36% surge in imports to an all-time high of $286.76bn.
The spike was welcomed by AUD investors as Australian exports are likely to have seen a bump amid the jump in demand.
Meanwhile, while placed on the defensive against the Australian Dollar, the Pound (GBP) traded positively against most of its other peers on Tuesday amid renewed expectations for a Bank of England (BoE) interest rate hike.
Bets for a rate hike before the end of 2026 have risen amid the fresh rise in energy prices as the resumption of hostilities in the Gulf has closed the Strait of Hormuz again.
However, the Pound’s upside potential was simultaneously capped by remarks from BoE Governor Andrew Bailey.
Speaking to the Treasury Select Committee, Bailey warned of potential instability stemming from the conflict as well as flagging the UK’s slow growth as a major risk to the economy.
Near-Term GBP/AUD Forecast: Slowing Chinese GDP to Drag on the ‘Aussie’? Looking ahead to the middle of the week, the publication of China’s latest GDP figures could influence the Pound to Australian Dollar exchange rate.
The ‘Aussie’ may face headwinds as consensus estimates predict Chinese economic growth will have cooled in the second quarter.
Meanwhile, notable UK economic releases are in short supply on Wednesday, which may leave movement in Sterling to be dictated by wider market trends.
GBPAUD currency pair recently reversed from the resistance zone between the key resistance level 1.9365 (former monthly high from March), upper daily Bollinger Band and the 50% Fibonacci correction of the downward impulse from December.
The downward reversal from this resistance area stopped the earlier minor impulse wave 3 of the medium-term impulse wave (C) from June.
Given the strength of the resistance level 1.9365 and the overbought daily Stochastic, GBPAUD currency pair can be expected to fall further to the next support level 1.9115.
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The Pound to Australian Dollar (GBP/AUD) exchange rate opens the new week around 1.9271 after holding close to five-month highs, with Sterling remaining well supported while the Australian Dollar faces another busy week of domestic data and renewed scrutiny over China's economic outlook.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.927065 (-0.05%)
Pound to Dollar (GBP/USD): 1.339 (-0.12%)
Australian Dollar to Dollar (AUD/USD): 0.694839 (-0.07%)
WEEKLY RECAP:
GBP/AUD spent much of last week consolidating just below the 1.93 level after a strong rally through June.
The Pound continued to outperform despite evidence that the UK economy is slowing.
Markets remain reluctant to price aggressive Bank of England easing while inflation stays above target, helping Sterling retain a yield advantage over several major currencies.
In its latest monthly outlook, MUFG said the Pound was among the strongest-performing G10 currencies through June, supported by resilient investor confidence and the fading inflation shock as oil prices retreated.
The Australian Dollar struggled to generate sustained demand.
Although global risk sentiment has improved following the easing of Middle East tensions, investors remain cautious over China's economic outlook, a key driver for Australian exports.
Reuters has reported that attention is now turning to China's second-quarter GDP and June activity data, with markets expecting slower growth after softer domestic demand and weaker investment. Those figures are likely to have an important bearing on the Australian Dollar this week.
In a recent client note, ING highlighted that Sterling is increasingly being driven by domestic developments, while commodity-linked currencies remain more exposed to changes in global growth expectations.
Near-Term GBP/AUD Forecast: China GDP and UK GDP in Focus For Pound Sterling, investors will watch Thursday's monthly UK GDP estimate for May, together with industrial production and trade balance figures. Stronger-than-expected data would reinforce the view that the UK economy has remained resilient despite softer business surveys.
For the Australian Dollar, the spotlight falls on China's second-quarter GDP, June retail sales and industrial production, all due on Wednesday. Stronger Chinese data would likely support the Australian Dollar by improving confidence in Australia's export outlook, while weaker figures could renew pressure on the currency.
Markets will also continue to monitor developments in commodity markets following the recent decline in oil prices and any fresh guidance from Reserve Bank of Australia officials after last week's policy decision.
If UK GDP surprises to the upside while Chinese growth data disappoints, GBP/AUD could retest resistance around 1.94.
However, stronger Chinese activity data and firmer commodity prices could allow the Australian Dollar to recover, pulling the pair back towards 1.90.
Oil is back in the driver’s seat, and both the pound and the aussie are feeling its grip. The Bank of England held rates at 3.75% in June, but with UK inflation at 2.8% and crude oil climbing on renewed Middle East tensions, markets now lean towards a hike before year-end. Down under, the Reserve Bank of Australia held its cash rate at 4.35% after three straight increases, with core inflation stuck at 3.6%, keeping the door open for further tightening. Two hawkish central banks, one shared inflationary culprit—yet it’s the existing 60-basis-point rate gap in Australia’s favour that is giving GBP/AUD its current shape, with the pair holding firm near the 1.93 handle as traders watch which bank blinks first.
Technical Outlook
GBP/AUD pits two currencies backed by hawkish central banks against each other. After a sharp downtrend, the pair found a floor in May 2026 and has since reversed into a medium-term uptrend as sterling claws back ground against the aussie. Price is now testing a key resistance zone that has previously capped upside attempts, making the coming sessions pivotal.
Bullish Scenario
Several sessions of strong bullish momentum have kept sterling supported. The pair is testing a crucial resistance zone at 1.9350–1.9400, which has rejected price before.
A confirmed break above could open the path towards the next resistance at 1.9520–1.9550.
Such a breakout would likely require fundamental support, such as further escalation in the Middle East or an even more hawkish BoE.
Bearish Scenario
Price could reject the resistance zone once again, reinforcing it as a key barrier.
A bearish RSI divergence on the 4H chart adds weight to this scenario, with price posting higher highs while the RSI prints lower highs—a sign of fading momentum.
The ascending trendline is now the nearest relevant support; a break below could expose the intermediate zone at 1.9080–1.9120, where price may pause and consolidate.
Should tensions ease or fresh UK political developments emerge, sterling could lose ground, breaking below this zone to test the next support at 1.8780–1.8820.
Ultimately, GBP/AUD’s next move will hinge on geopolitical and macroeconomic developments, alongside these key technical levels. Which of the two currencies will show greater strength in the sessions ahead?
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