AUD: Limited Downside Risks; GBP: To Trade Within This Year's Range - Credit Agricole

AUD: Limited Downside Risks; GBP: To Trade Within This Year's Range - Credit Agricole

In Australia, at 3.1% (cons. 2.8%) Q1 GDP was released well above expectations. From that angle it remains difficult to make a case of further rising RBA easing expectations to the detriment of the AUD. As such the currency should stay driven by external factors. However, in an environment of capped short-term Fed rate expectations and as speculative positioning is closer to balanced territory,downside risks seem limited.

When it comes to the UK, the main focus should remain on polls as a key currency driver, especially as the EU referendum is only three weeks away. The closer the referendum comes the more subject to rising volatility the GBP should become. From a broader angle the currency should continue to trade within this year's range.