AUDGBP: Momentum still with sterling - Westpac

Sean Callow, Research Analyst at Westpac, explains that Sterling has gained on progress in Brexit negotiations and the Bank of England's steps towards another rate hike, while AUD was hit in March by the US policy pivot from tax cuts to tariffs.

Key Quotes

“With pricing for the RBA to raise rates this year continuing to fade, momentum could take AUD to fresh post-Brexit lows against GBP near term, in the AUD/GBP 0.5350/75 or GBP/AUD 1.86-1.87 area.”

“But speculators are quite long GBP/USD so if they take profits e.g. after the BoE May meeting or on setbacks in Brexit talks, it could well be back to the AUD/GBP 0.55 handle, GBP/AUD 1.81-1.82 into June.”