Author, Mike Smith
After the latest UK Budget announcement, I take a fresh look at the Pound to Australian Dollar forecast for the rest of 2025 and into early 2026. Here’s my latest view on where GBP/AUD is headed and the factors now driving the rate.
What’s happening with the Pound to Australian Dollar exchange rate?
The Pound to Australian Dollar exchange rate has edged lower in the past fortnight.
GBP/AUD was settled in the $2.03s in the final week of November but failed to hold this level.
Sterling briefly traded below the $2 threshold last Friday before ending the week slightly above this key technical level.
What’s caused the near-term slide for the Pound?
Robust export data has helped the Australian Dollar in recent weeks.
Strong global demand for Australian iron ore and energy products have supported the domestic economy.
Data showing that Australian inflation is refusing to drop below 3% has also helped the Aussie Dollar.
What factors have improved sentiment towards the Australian Dollar?
The Pound has performed reasonably in the markets following Rachel Reeves’ Autumn Budget Statement.
Reeves avoided any negative surprises in her speech, triggering steady demand for UK government debt in global bond markets, which helped Sterling.
The drop for the Pound to Australian Dollar rate was therefore caused by renewed support for the Aussie currency.
What about relative interest rates in Australia and the UK?
The Reserve Bank of Australia (RBA) has steadfastly held its benchmark interest rate at 3.6% since August.
The RBA makes its latest monetary policy announcement in the early hours of Tuesday 9th December (UK time).
With the pace of Australian price rises failing to drop, futures markets are pricing-in a slender 5% likelihood of an RBA rate cut this month.
Most economists believe that the RBA will not cut interest rates again until February-May 2026 at the very earliest.
Investors will learn more about the state of Australia’s economy when the latest domestic jobs numbers are released on Thursday 11th December.
Meanwhile, UK interest rates remain at an elevated 4.00%.
What about the Pound’s prospects leading up to Christmas?
The last full week before Christmas will be decisive for Sterling.
UK jobs data and inflation data are set for publication on 16th and 17th December respectively.
The major risk event before year-end comes on Thursday 18th December, with the Bank of England announcing its latest interest rate decision.
My near-term Pound to Australian Dollar forecast
I forecast that the Pound to Australian Dollar exchange rate will trend lower towards the $1.96 level near-term.
GBP/AUD spent much of the second half of 2024 trading in a congested area on either side of this level.
Futures markets are pricing in a 90% likelihood that the Bank of England will cut interest rates by a quarter of a percent later this month.
Such a move would be likely to send Sterling break lower to test this level once more.
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That’s why, at Key Currency, our expert traders are your best ally, to find you the best GBP/AUD rate at the right time, saving you money.
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What is a good GBP to AUD rate?
The GBP to AUD rate tells you how many Australian Dollars can be bought for 1 British Pound.
Buyers of Australian Dollars (AUD) want a high rate.
Buyers of British Pounds (GBP) want a low rate.
It’s worth getting some historical context to help understand whether the current GBP to AUD rate is good or bad.
Over the past 10 years, the average GBP/AUD exchange rate has been $1.75.
That can be used as an easy benchmark for today.
At present, the GBP/AUD rate is sitting well above its long-term average of $1.75, making it a good time to buy Australian Dollars.
In August 2023 and July 2024, the GBP/AUD rate almost hit the $2 level. That’s a rarity these days.
Since Brexit, the GBP/AUD rate has only got above the $2 mark for a brief period in March/April 2020. With the rate back near $2, it’s a good indication that the rate is currently strong.
It’s also worth looking at the high and low points to get a feel for where the current rate sits within its trading range.
Over the last decade, the GBP/AUD rate reached a high of $2.2037 on 7th September 2015 and a low of $1.4428 on 12th March 2013 (source: Bank of England).
At present, the current GBP/AUD rate is closer to the historical highs than the lows.
This is another indicator of the favourable GBP to AUD rate today.
If you’re interested, check out our guide on how to transfer money from the UK to Australia.
GBP to AUD weekly forecasts (tips and tools)
Exchange rate forecasts depend on the window of time you are looking at.
For example, you can have positive short-term indicators alongside negative long-term indicators. The two can co-exist.
Forecasting always depends on your time frame.
Over shorter time frames – hours, days and weeks – there’s only a small number of things that can affect the GBP to AUD rate. It means you can narrow down your focus.
To keep track of upcoming news, take a look at the DailyFX economic calendar.
While there are plenty of other free economic calendars, I prefer this one because of its clear layout and that each piece of data is given a low, medium, or high level of importance.
I tend to disregard the low and medium-impact events and just concentrate on those with a high impact.
An economic calendar is not necessarily a great way of forecasting exchange rates, but it can be useful to help manage risk.
As currency brokers, we will look at the calendar and may hedge the risk before an important event.
If you are cautious by nature or cannot afford the GBP/AUD rate to move against you, it makes sense to convert your money ahead of a risk event.
Another popular way of looking at GBP/AUD trends and forecasts is to use technical analysis.
This involves using price patterns to identify trends and predict future exchange rate movements.
You can get a feel for recent price signals for the GBP to AUD exchange rate here.
Just select the timeframe you want (in orange), and it will give you a summary of whether it’s a Buy (GBP to rise) or a Sell (GBP to fall) using technical analysis.
I appreciate not everyone has the time or knowledge to analyse exchange rates.
You might find it easier to speak to someone that follows this day in, day out.
Ay Key Currency, part of our service is to help guide you on exchange rate trends and market opportunities.
GBP to AUD forecast 12 months+ (some practical advice)
Longer periods call for a different approach to forecasting.
Short-term news becomes irrelevant. Bug themes have time to play out.
My view is that there are so many factors that could affect longer-term GBP/AUD rates that you are best to focus on historical reference points to guide your timing.
From a practical point of view, I would look at historical rates using a GBP/AUD chart – 1 year and 5 years will give you a good enough perspective.
Look to identify areas of support (troughs) and resistance (peaks), as well as the current underlying trend.
You may also find it useful to speak to a foreign exchange broker who is watching rates continuously throughout the day.
It’s something we offer are part of our money transfer service.
Need some guidance on exchange rates?
Getting a good or bad exchange rate can make a massive financial difference to you.
In the past 5 years alone, the GBP/AUD rate as high as $2.05 and as low as $1.59.
That’s over a 20% swing from high to low.
It can be one of the more volatile currency pairs.
Even daily fluctuations in the GBP to AUD rate can be big, so it’s worth keeping a close eye on things.
At Key Currency, we are different from other money transfer companies.
We are not some online app or platform that makes you do all the work yourself.
We will discuss and agree on the right time to exchange your money, by understanding your requirements and taking advantage of any favourable movements.
Even if you are not ready to exchange your money, we can monitor the GBP/AUD rate for you and keep you up-to-date on market movements.
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What’s more, Key Currency is regulated by the FCA as an Authorised Payment Institution (No. 753989). All money transfers are conducted through safeguarded client accounts.
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