Gbpaud To Slip Nomura

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Gbpaud To Slip Nomura

Gbp/Aud To Slip Under 2.00 - Nomura Forecast

The GBP/AUD is exchanging hands around the 2.067 handle for now. But Nomura analysts have issued a forecast that says the pair is at risk of dropping under the 2.00 handle.

According to Nomura, the current value of GBP is not sustainable at all. They cited the fears of the UK economy going into stagflation along with the BoE pivot.

Gbp/Aud To Find Next Support At 1.97

With these risks, the 2025-end forecast of the GBP/AUD puts it near 2.00. They believe that the GBP/AUD may even slip under that support and stabilize around 1.97.

Nomura also added that the BoE is expected to go ahead with more rate cuts. Over the long run, this will make the GBP a less attractive option as compared to the AUD.

In addition, the UK economy is now weaker, while consumers are facing higher inflation. All of this has made the perfect recipe for disaster for the GBP.

Going ahead, the stagflation of the economy will make things tough for the BoE. So, we can't expect the central bank to set a clear policy.

At the same time, Nomura also believes that the value of the GBP is not justified based on the fundamental data.

Also, the recent gains in the GBP were mostly driven by higher rates. But now, the things have changed and it will also translate into the GBP/AUD exchange rate.

Meanwhile, the chances of a minority government are now low after the recent convincing election. So, we can expect the RBA to go ahead with its rate cut.

However, the market forecast shows a little too many rate cuts during the next few months. So, any adjustment to the rate cuts will be deemed as positive by the market forces.

As a result, the AUD will strengthen against the GBP which will push the GBP/AUD pair under the 2.00 handle.

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