Pound To Aussie Dollar Forecast – Is Now The Best Time To Buy AUD From GBP?

GBPAUD Forecast Highlights

• GBPAUD appears to have found tentative floor at 1.850
• AUD strength a driver of the fx rate; although RBA could be near an inflection point
• Falling energy prices and yields may lead to a slow rebound in GBPAUD

How has the Pound performed against the Australian Dollar recently?

The last year saw Sterling haemorrhage strength persistently. This time last year, for example, 2.1 Aussie dollars were needed to buy a pound; now, only 1.90.

While tentative buying of GBPAUD appears to have emerged at around 1.850, the fx’s trend is still pointing downwards (see below).

One of the reasons behind AUD’s strength is the continuation of the commodity supercycle. A few commodities, such as natural gas, saw good demand this year as geopolitical tensions in the Gulf rose. Demand for others metals such as lithium and gold also expanded. Australia is a large exporter of these commodities.

The other is the series of rate hikes enacted by the Reserve Bank of Australia. This boosted the Aussie dollar.

Looking forward, however, we could see a period of stabilisation in GBPAUD as these factors appear to be priced in. If the Strait of Hormuz re-opens, for example, this will relieve the immense tension in the global energy market; prices of energies may contract as a result.

Of course I could be early in this market conjecture. A “deal” has been announced so many times in the recent past without lasting success. Hence prices may bounce around 1.850 for the time being as the rate attempts to establish a floor.

Is it a good time to buy Aussie Dollars with pounds?

• If you can wait, perhaps step back and see if GBPAUD breaks above 1.900 (GBP stronger).
• The rate is currently sitting near its lows and momentum has gradually shifted to a less GBP-negative stance. The bounce off 1.850 may strengthen further.
• Of course, there is always the possibility that the rate slips again to below 1.850. So I would watch to Aussie Dollar in tranches to reduce the risk.

Will the pound get stronger against the AUD in the second half of 2026?

The central bank of Australia is in a tightening mode.

The Reserve Bank of Australia hiked the nation’s policy rate three times this year already, in consecutive meetings. When RBA increased the Cash Rate for the first time back in February, the monetary Board “considers that inflation is likely to remain above target for some time.”

Has their view changed? In latest May’s monetary statement, here was RBA’s assessment:

Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of this increase reflected greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel and related commodity prices, which are already adding to inflation. There are early signs that many firms experiencing cost pressures are looking to increase prices of their goods and services. Short-term measures of inflation expectations have also risen.

In other words, the central bank is still worried that inflation will get out of hand. The chart below shows that the country’s CPI has rebounded back to 4%. This clearly breaks the downward trend from 8%.

But it is also clear that 4% is a major ceiling for the Aussie CPI. The statistic has only risen north of 5% once in three-and-half decade, in 2022. So the CPI’s upside here is not as clear cut as imagined. This may reduce the probability of another round of multiple rate hikes in the second half of 2026.

Moreover, the Trump administration is preparing to cut a deal with Iran, in preparation for the November mid-term election. This will lower oil prices (already trading sub $85 per barrel as I write) and would cap global inflationary pressure into the second half of 2026.

If RBA halts its tightening campaign due to weakening inflation, GBPAUD may to rebound from its recent lows (AUD modestly weaker).

Of course, this depends on GBP holding firm. Simmering UK political tensions and weak economic growth are not helping to boost the case for GBP. Hence even if GBPAUD rebounds, it could be a slow and gradual one.

Source: RBA

What is the GBPAUD forecast in weeks, months, and years?

According to poundsterlinglive.com, the market is predicting an upward sloping trend GBPAUD (AUD modestly weaker).

The aggregate data suggests GBPAUD to appreciate in the coming months, to above 1.900. This, I suspect, is due to the dip in interest rate forecasts on Australia’s interest rate curve. Investors are expecting AUD rates to fall on the 2-3 year maturity. (see www.worldgovernmentbonds.com/country/australia/)

Thus the base case here is that GBPAUD is reversing its trend due to weaker AUD rate action.

Source: poundsterlinglive.com (Jun 2026)