MUFG Pound-to-Australian Dollar Forecast: Sell GBP/AUD Target 1.93 - Exchange Rates UK
MUFG has issued a sell recommendation on GBP/AUD with a target of 1.93, reflecting bearish sentiment on the pound relative to the Australian dollar.
What the desk is arguing
MUFG recommends selling GBP/AUD targeting 1.93, indicating expectations for Australian dollar outperformance. The thesis likely hinges on divergent monetary policy outlooks, with the RBA potentially maintaining higher rates than the BoE.
Supporting evidence may include relative commodity price dynamics and Australia's trade surplus. The desk implicitly rejects the view that UK economic resilience will support the pound.
Where it sits in our coverage
Our consensus target for GBP/AUD is around 2.00, with a firm spread of 1.93–2.10. MUFG's bearish view sits at the lower end of our range, aligning with a minority of forecasters.
Specific firms and their published targets include: - Barclays: 1.98 (Dec-26) - JPMorgan: 2.05 (Dec-26) - Goldman Sachs: 2.01 (Dec-26)
How other firms see it
Barclays aligns with MUFG's bearish stance, targeting 1.98. Conversely, JPMorgan is contrary with a higher target of 2.05, reflecting a more optimistic view on the pound.
Other firms like Goldman Sachs are relatively neutral at 2.01, sitting between the two extremes.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01MUFG recommends selling GBP/AUD targeting 1.93.
- 02The call is at the lower end of our consensus range of 1.93–2.10.
- 03Barclays aligns, while JPMorgan adopts a contrary, more pound-favorable view.
Market implications
A successful move to 1.93 would imply significant AUD strength, potentially driven by hawkish RBA policy and commodity price support. This could pressure GBP/USD dovish positioning.
Risks to this view
Risk of reversal if BoE pivots hawkish or RBA surprises dovish. Commodity price shocks or risk-off sentiment could also undermine AUD.
Sources & References
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