Sean Callow, Research Analyst at Westpac, suggests that the Bank of England’s aggressive response to the Brexit vote should weigh on sterling for some time.
“The BoE MPC delivered a range of measures and suggested there is more to come. The pound has shown little inclination to recover the ground lost on the vote despite some potential bargain-hunting by foreign direct investors.
Meanwhile, AUD should continue to find support from resilient commodity prices, broadly positive global risk appetite and an absence of the near term threat of another RBA rate cut.
This points to AUD extending its recent gains against the pound to GBP/AUD1.66-1.67 multi-week. Further out (say Q4), AUD should start to slip back a little as supply growth catches up with commodity prices. But AUD downside should be more limited vs GBP than against, say USD.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.