GBP/AUD Forecast Overview for H2: Median Upgraded

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Since the start of the year, the year-end median forecast for the Pound to Australian dollar exchange rate has risen by 500 pips.

This is according to the mid-year edition of a quarterly consensus forecast collation from Corpay and Pound Sterling Live, now available as a free discretionary download.

The median projection is the level at which most of the world's leading investment banks and financial institutions see an exchange rate at a given point in time. We think it is the most useful forecast point available to those interested in a currency pair's outlook.

The media point is derived from a Bloomberg poll of investment bank analysts and has risen by 500 pips since the year-ahead survey was conducted in December.

The shift higher reflects the Pound's ongoing outperformance relative to its G10 peer currencies.

The median forecast point allows those with payment requirements to ascertain the prospects of GBP/AUD rising or falling from current levels, which allows for rational decision-making.

The lowest forecast submitted for end-2024 has also risen, while the highest individual prediction has risen 100 pips to 1.89.

The report also reveals predictions made by some notable Australian investment banks and it is Westpac has the highest forecast. In contrast, Commonwealth Bank has the lowest amongst the surveyed Aussie lenders.

The Pound rose against the Australian Dollar in the first two months of 2024 as markets rapidly lowered expectations for U.S. interest rate cuts, which weighed on commodity-linked currencies such as AUD.

That said, GBP/AUD has been trending lower since about April, as per the 50-day moving average. It is still pointed lower at the time of writing and we are watching for a fresh breakdown in the pair if the support line at 1.8910 breaks and gives way.

If this is the case, then 1.86 - the December low - could come into play.