Barclays Pound-Australian Dollar Forecast: Sell GBP/AUD, Target 1.85 - Exchange Rates Org UK

What the desk is arguing

Barclays advocates for a sell position on GBP/AUD with a targeted exchange rate of 1.85. The recommendation emerges from concerns about the relative strength of the Australian dollar amidst a more volatile UK economic outlook.

Supporting this view, Barclays highlights fundamental indicators suggesting that the Australian dollar may outperform the pound due to higher commodity prices and a more favorable interest rate environment in Australia. They implicitly reject the notion that the UK economy will rebound strongly enough in the short term to support GBP strength against AUD.

Where it sits in our coverage

Our consensus target for GBP/AUD is currently set at 1.075, reflecting a more cautious outlook than Barclays’ aggressive target. This divergence underscores differing interpretations of both currencies' economic fundamentals amid ongoing macro uncertainty. With current spreads indicating a tightening bias in favor of the Australian dollar, Barclays' perspective stands out as particularly bearish.

Among our tracked firms, we have notable targets including:

• Barclays: 1.85
• JPMorgan: 1.10
• Goldman Sachs: 1.05

How other firms see it

JPMorgan maintains a bullish stance on GBP/AUD with a target of 1.10, aligning with expectations of recovery in the UK economy. Conversely, BofA is at the lower end of the spectrum, projecting a target of 1.04, indicating a more bearish outlook compared to Barclays.

• Barclays: Sell, 1.85
• JPMorgan: Aligned, 1.10
• BofA: Contrary, 1.04