The Australian Dollar is at risk of a setback that could see it trading down near to some of its lowest levels against the Pound since the onset of the pandemic, according to downgraded forecasts from Commonwealth Bank of Australia.

The Pound to Australian Dollar exchange rate may be in the early stages of partially reversing a steep multi-month slide in a process that could see it better supported above the 1.75 level and possibly even breaking back above the 1.78 handle in the days or weeks ahead. 

The Pound to Australian Dollar rate entered the new week on its front foot but could be volatile in the days ahead, with both up and downside risks, if forthcoming Federal Reserve (Fed) and Bank of England (BoE) policy pull in opposing directions for GBP/AUD. 

The Pound to Australian Dollar exchange rate entered the new week close to some of its lowest levels since 2019 and  would be at risk of slipping back to 1.72 in the week ahead if Tuesday’s Reserve Bank of Australia (RBA) policy decision provides the Antipodean currency with a further tailwind.

The Pound to Australian Dollar rate has struggled to sustain its May rebound and could be set to remain suppressed at the lower end of a multi-year range in the days and weeks ahead as the Chinese economy reopens in earnest, likely aiding an outperformance by the antipodean currencies. 

The Pound to Australian Dollar exchange rate fell toward the bottom of a fortnight-long range early in the new week but could be likely to retest the top of that band up around the 1.78 handle in the days ahead.

The Pound to Australian Dollar exchange rate has rebounded off its early May lows during recent weeks but has met tough resistance near the 1.78 level on the charts, which could continue to bar Sterling’s path higher in the days ahead and during what is an important week for Australian economic data.

The Pound to Australian Dollar exchange rate entered the new week on its front foot as Sterling staged a partial recovery from earlier losses and its antipodean counterpart came under pressure alongside the Renminbi amid mounting market concerns about the Chinese economic outlook.

The Australian Dollar is likely to outperform Pound Sterling during the weeks and months ahead according to Commonwealth Bank of Australia (CBA) research, with elevated commodity prices and shifting central bank policies conspiring to drive GBP/AUD down to 1.66 this quarter.

The Pound to Australian Dollar exchange rate entered the holiday-shortened week close to its April highs but would risk slipping back beneath the 1.75 handle in the days ahead if the Federal Reserve (Fed) reinforces a nascent upturn in AUD/USD or if the Bank of England (BoE) weighs on Sterling.

GBP/AUD approaches lowest in two years as AUD maintains best performer status.

Any weakness in the Australian Dollar is being viewed by strategists at Westpac as an opportunity to buy, a view which if correct would mean Pound-Australian Dollar exchange rate upside will remain limited near-term.

GBP/AUD drawing line under steep sell-off, may be set to hold above 1.7950 this week.

GBP/AUD looking for a foothold near 1.8350, could steady as market wavers on RBA view.

GBP/AUD set to extend & could top 1.9607, with GBP set to outperform lethargic AUD.

GBP/AUD recovery places 22-month highs in sight, supported at 1.8805, could retest 1.92 short-term.

GBP/AUD uptrend intact as AUD slumps on surging volatility. Eyes on a rebound of oversold markets.

GBP/AUD risks slippage near to 1.8815, may struggle above 1.90 in short-term.

"The tug-of-war between the China slowdown and RBA policy normalization is likely to be the key theme for AUD in 2022" - Bank of America.

The U.S. Dollar is forecast by HSBC to continue a run of outperformance in 2022, but the Australian Dollar also looks set to appreciate say analysts at the UK-based global lender.