Author, Mike Smith
A GBP to AUD forecast is an expectation of the exchange rate at a future date.
GBP to AUD forecasts are used to help decide whether it’s a good or bad time to exchange your money.
What is a good GBP to AUD rate?
The GBP/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.
At present, the GBP/AUD rate is sitting above the long-term average.
As a general rule, any GBP/AUD rate that’s above the long-term average of $1.75 could be considered a good rate.
It’s also worth looking at the high and low points over the same period to get a feel for where the current rate sits within its trading range.
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. Again, this would indicate a favourable GBP to AUD rate based on historical data.
Is GBP going to rise against AUD?
These are three pivotal factors driving GBP to AUD forecasts:
- The UK economy is expected to grow 7% in 2021 compared to 5.3% for Australia (source: IMF)
- The risks to the UK from Brexit have reduced
- China is causing concerns for the Australian Dollar.
The UK was initially hit harder by COVID, and therefore has greater potential for an economic bounce.
Economic growth forecasts point to the UK’s outperformance of Australia over the short term.
Another important factor is that the Pound was weighed down by Brexit risks following the referendum result in 2016.
While there are lingering issues with Brexit, most of the execution risk has come and gone.
The so-called ‘Brexit discount’ embedded in the Pound is still unwinding.
A third factor is that China poses a risk for the Australian Dollar. China is by far Australia’s largest trading partner (almost 40% of exports).
Recently, China has been tightening credit to cool its property market. There have also been rising political tensions (and trade skirmishes) between China and Australia.
China has become so influential upon Australia that some traders even view the Australian Dollar these days as a liquid proxy for the health of the Chinese economy.
Political and economic concerns about China are pulling down the Australian Dollar.
In the first 6 months of 2021, the British Pound gained 4.4% against the Australian Dollar.
If these core macro themes continue to carry on, then you would expect them to lift the GBP to AUD rate.
If you would like to find out our latest GBP/AUD rates or keep up to date with market trends and news, request a quote below.
GBP to AUD weekly forecast – a short-term approach
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 timeframe.
Over shorter timeframes – 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.
In terms of upcoming news, I would suggest looking 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.
Personally, 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 prior to an important event.
If you are cautious by nature or cannot afford for 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.
It’s worth checking out the GBP to AUD technical analysis on investing.com.
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.
If you would rather speak to someone about your personal situation and requirements, you can always talk to a currency broker.
GBP to AUD forecast 12 months+ (some practical advice)
Longer time periods call for a different approach to forecasting.
Bigger macroeconomic themes have time to play out, and short-term news becomes irrelevant.
While time gives you flexibility, it can also lead you to think that there’s always a better time to exchange your money.
I hear this kind of thing all the time:
- The Pound is going up; I’ll wait for it to go higher.
- The Pound is down; I’ll wait for it to come back up.
In other words, now is never a good time because the GBP/AUD rate is always rising or falling.
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.
Even daily fluctuations can greatly affect the exchange rate you receive as a customer.
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 personal 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.
We have attained a 5-star rating on Trustpilot, based on over 900 customer reviews.
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.
If you would like to find out more about our service or our latest rates, get a free quote below.