Martina Song, Research Analyst at Westpac, expects AUD to rise further against GBP in the weeks ahead as domestic data have capped AUD for now but shouldn’t pose many downside risks, and AUD should hold steady.
“GBP meanwhile continues to be weighed down by Brexit. We see GBP/AUD extending towards the 1.56 area.”
“Brexit uncertainties should come to the fore as Prime Minister May triggers Article 50 by the end-March deadline. In addition to the negotiations beginning, the prospect of a second Scottish independence referendum too should cause concern, and drive GBP underperformance.”
“Meanwhile, the Aussie continues to benefit from USD weakness, and remains the best performing G10 currency year to date. Until US data make the case for another Fed hike, we should see the USD leg remain soft. Commodity prices remain around highs since May 2014. While Australian employment and wages numbers suggest limited upside for AUD, other releases aren’t arguing for much more weakness.”