Transfer GBP to AUD

Pound Sterling to Australian Dollar Exchange Rate

The Pound (GBP) to Australian Dollar (AUD) exchange rate is one of the world's most traded currency pairings. Below are some facts about each currency and the history of the GBPAUD rate.

British Pound Sterling (GBP)

The British Pound, aka Sterling, is the official currency of the UK, as well as a number of other small territories around the globe. One Pound (£) is subdivided into 100 pence. Its currency code is GBP and its currency symbol is £.

As the world's oldest continuously traded currency, the Pound is its fourth most traded, with only the exchange of US Dollars (USD), Euros (EUR) and Japanese Yen (JPY) coming ahead of it in volume. Sterling is issued by the <a href="http://www.bankofengland.co.uk" target="_blank">Bank of England (BoE),</a> which also sets interest rates for the UK economy.

The term Pound Sterling was initially derived from the Old English term for small star, which was present on the coins at the time. Forex traders in currency markets often use the term 'Cable' to denote the Pound to Dollar exchange rate (GBP/USD).

Interesting fact: the British Pound is colloquially known by many names, including a 'quid' (£1), a 'pony' (£25), a 'monkey' (£500) and a 'grand' (£1,000).

Australian Dollar (AUD)

The Australian Dollar is the official currency of Australia, with one Dollar being subdivided into 100 cents. Its currency code is AUD and its currency symbol is $, A$ or AU$. The most popular currency to be traded with AUD is the US Dollar (USD). The “Aussie”, as it is also known, is ranked as the fifth most traded currency in the world.

One of the most noteworthy features of the “Aussie” is the extent to which it is influenced by risk factors and commodity prices. With the <a href="https://www.rba.gov.au/" target="_blank">Reserve Bank of Australia (RBA)</a> generally setting interest rates higher than in other developed economies, investors flock to buy AUD whenever global risk sentiment is low. Australia’s proximity to Asian markets means the Chinese economy has a marked effect on AUD.

Interesting fact: As a former colony of Britain, Australia initially used the Pound as its currency. This changed in 1910 when the new national currency the Australian Pound was introduced, which was fixed in value to Sterling via the Gold Standard. This lasted until decimalisation in 1966, when the Australian Dollar was introduced.

British Pound Australian Dollar (GBP/AUD) Exchange Rate

The Pound Australian Dollar exchange rate (GBP/AUD) – is a popular trade on FX markets. Furthermore, with Britain and Australia enjoying close historic links and diplomatic relations, there is plenty of trade between the two countries that necessitates demand for one another’s currencies.

Historically, the Pound dropped as low as AU$1.50 soon after the latter’s launch in the 1960s, before surging above AU$3.00 in the early 2000s and then plunging once more to below AU$1.50 in the 2003-2004 period.

In 2020, the GBP/AUD exchange rate has been rising steadily from around AU$1.91 to the AU$1.98 range today, with coronavirus fears hammering the Australian currency on world markets.

Factors That Drive Pound Australian Dollar (GBP/AUD) Exchange Rates

The value of the British Pound (GBP) is influenced primarily by Bank of England rates and UK political/economic news. With much of the UK economy relying on consumer spending and financial services (stocks, bonds, insurance products), any factor which threatens these sectors tends to have a detrimental effect on the Pound.

A slump in the Pound was observed immediately after the Brexit referendum in the UK, although the Pound has since made up most of these losses against the Dollar but remains weaker than it was pre-referendum.

For the Australian Dollar – which is considered by traders to be a commodity currency – the main driving factor of value is global risk sentiment and the commodity markets. Demand from China – Australia’s biggest trading partner – is a major driver of AUD, with the price of iron ore on world markets being another one. Australia is the world’s second largest producer of iron ore (behind China). Global risk sentiment plays a huge part in determining prices for the “Aussie”. At the first sign of a war, a large natural disaster or a disease pandemic, AUD will often plunge in value as investors shift their funds into safe-havens such as the US Dollar (USD) or the Japanese Yen (JPY).

Outlook for GBP/AUD

The Pound to Australian Dollar (GBP/AUD) exchange rate today is driven in the main by global risk considerations and the status of the Chinese economy. With growth in China seen to be slowing, AUD faces considerable downside pressure as a result. With its commodity export-driven economy, the growth of the global economy is the main deciding factor for AUD rates today.

Another factor that is a big influence of the Australian Dollar compared to other currencies is the rate of unemployment. The Reserve Bank of Australia considers the unemployment rate to be a key deciding factor when setting interest rates, meaning that FX traders pay close attention to economic data releases that relate to employment levels and the number of new positions created in a given time period. A low level of unemployment is generally bullish for AUD.

In Mar 2020 the RBA decided to cut interest rates in order to stimulate the economy in the face of fears relating to the coronavirus. This had the temporary effect of strengthening AUD against GBP, although it proved to be short-lived. In the immediate future, the Pound Australian Dollar exchange rate is likely to be driven by ongoing concerns about the growth prospects of the world economy, and China’s in particular.