AUD/GBP likely to retest 0.5800 - Westpac
According to Sean Callow, analyst at Westpac, the recent market flirtation with RBA easing may prove fleeting with AUD’s main challenge being the fragile global risk environment, especially US-China trade relations, as the clock ticks towards the 1 March deadline for a deal.
“Recent news flow has been more encouraging, with potential for sharp AUD outperformance on an agreement.”
“The GBP mood will of course be largely driven by Brexit developments. We doubt that UK PM May’s compromise bill will pass Parliament on 15 Jan, raising the risks of a “hard” Brexit. This could see sterling re-test the Dec 2018 lows around 1.7200, or AUD/GBP 0.5800.”