Bearish Sterling Scenarios:
1) Growth slows below 1% as consumers are squeezed by inflation and falling house prices.
2) Outright capital repatriation from slower moving long-term investors including central banks.
3) Initial Brexit talks flounder on the size of the UK's exit-bill.
Bullish Sterling Scenarios:
1) The govt pursues a lengthy transitional deal with the EU which maintains the trade status quo for 2-3 years.
2) The economy rebounds to 2.0-2.5%.
3) 2-3 MPC members dissent for tighter policy at the Aug MPC/QIR,
4) Current a/c deficit shrinks below 2%.
Bearish AUD Scenarios:
1) The unemployment rate breaks above 6%, forcing the RBA to respond more aggressively to weak inflation;
2) The Fed responds to animal spirits and bullish survey data by delivering a faster pace of hikes than currently expected;
3) China data weaken materially, validating the fall in commodity prices.
Bullish AUD Scenarios:
1) China eases policy and commodities rebound;
2) The Fed’s tightening timeline is severely disrupted by a weakening in local data; or
3) The Australian housing market reaccelerates.
Overall, the major trend has been bearish bias, while FxWirePro's hourly GBP spot index has turned into -55 (which is bearish while articulating), and hourly AUD spot index was at shy above 55 (bullish). For more details on the index, please refer below weblink: