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What is the AUD to GBP forecast for 2023? Will the Aussie dollar recover against the British pound or is it set to weaken again towards the end of the year? We take a closer look at the key factors impacting the AUD/GBP exchange rate and include predictions from the big four banks.
AUD outlook for 2023
2023 has not been a strong year for the Aussie dollar. It's fallen in value against most major currencies, including the British Pound and the US dollar. Higher interest rates elsewhere around the world have attracted investment away from Australia, while China's weak economic recovery has also driven the dollar down.
Meanwhile, 2022 was a turbulent year for the GBP. Following the country's debt crisis and the short-lived tenure of Liz Truss, the pound plummeted to historic lows in 2022, almost reaching parity with the US dollar in September 2022. At the same time, 1 AUD reached a high of 0.60 GBP.
But the pound has experienced a bounce back in 2023, driven by interest rate rises and conservative fiscal policy. As a result, after the Australian Dollar opened the year trading at 0.56 GBP, it's since trended largely downwards, dropping to around 0.50–0.51 GBP in August and September 2023.
AUD vs GBP forecast
NAB predicts the AUD will hold steady against the GBP at 0.50 through to the end of 2023. However, it then predicts that the AUD will start rising in value, climbing to 0.53 GBP by June 2024 and 0.54 GBP by December 2024.
In April 2023, Commonwealth Bank predicted the dollar to trade at 0.55 GBP by the end of 2023, then climb to 0.59 GBP by the end of 2024. Meanwhile, in its July 2023 Market Outlook, Westpac forecast a rate of 1 AUD = 0.54 GBP by December 2023. Westpac also expects the Aussie dollar to climb slightly against the pound in 2024, reaching 0.57 GBP by December of that year.
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Key factors impacting the Australian Dollar and British Pound
There are several factors that impact the AUD to GBP forecast, such as:
The recovery of the pound. 2022 was a turbulent year for the UK, with the country experiencing a debt crisis and swapping prime ministers at breakneck speed. However, since Rishi Sunak took office, the economy has stabilised and the pound has risen in value.
High interest rates in the UK. In August 2023, the Bank of England raised interest rates for the 13th consecutive time, to 5.25% but chose to pause in September. While Australia has also experienced plenty of rate rises, the Reserve Bank's official cash rate of 4.10% is significantly lower. This has attracted investment away from the Aussie dollar and towards the pound.
Commodity prices. Australia's economy is heavily reliant on commodities exports, so increasing or falling commodity prices can have a big impact on the value of the dollar. And with China's slow economic recovery restricting demand for exports like iron ore, this has put downward pressure on the dollar. However, a strengthening Chinese economy could be good news for the dollar's value in the future.
Russia's invasion of Ukraine. With Russia's ongoing war in Ukraine driving up energy prices, economic growth in the UK is expected to remain slow in 2023.
The best time to exchange AUD to GBP
The best time to exchange AUD to GBP is when the exchange rate is near a high over a 3-5 year period. Even if you monitor financial news closely, it's still difficult to predict future exchange rate movements. If you need to exchange money, it's worth using a foreign exchange specialist that can provide expert advice on when to exchange currencies to get the best rate.
If you need to send a large money transfer from Australia to the UK, it's also a good idea to choose a currency broker. Some providers offer forward contracts, which allow you to get an exchange rate today for a transfer that will be sent 12 months or more in the future. Alternatively, you could use a limit order to ensure that your transfer is sent automatically as soon as your desired exchange rate is achieved.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
The Aussie dollar has fallen against the British Pound as Australia's interest rates are lower than in the UK and US. Investors have been drawn away from the Australian Dollar. China's weaker than expected economic recovery following the COVID-19 pandemic has also put downward pressure on the dollar, while conservative economic policies in the UK have helped the pound rebound after the debt crisis in 2022.
Expert forecasts for the AUD/GBP rate through the end of 2023 and into 2024 are cautiously optimistic, with the rate expected to hold steady or climb slightly. Predictions from NAB, Commonwealth Bank and Westpac have the dollar trading at between 0.50 and 0.54 GBP by the end of 2023.
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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