Lloyds Banking Group projections suggest the GBPAUD could be at the best levels possible.

The pound sterling may have put its best rates against the Australian dollar behind it according to new research from Lloyds Bank.

Analysts have confirmed that the GBP/AUD exchange rate should trend lower in 2016.

The pair hit a best exchange rate of 2.24 in August of this year, but the trajectory from here takes us back below the magic 2.0 level.

At the time of writing the conversion is noted at 2.1351, a rate of 2.03 is currently forecast by Lloyds for year-end 2015.

RBA Governor Stevens has suggested the exchange rate is near fair value at current levels and is currently below the central bank’s target level of 0.75 against the USD.

This matters for the pound - if the RBA believe the AUD/USD is at fair value then the likelihood of the RBA pressing the Aussie dollar lower diminishes.

The GBP/AUD will therefore find no support from the Australian central bank.

“This provides a strong signal that we may have reached the bottom in the Australian dollar after depreciating by nearly 11% against the USD since the start of the year,” say Lloyds in a note to clients.

The GBP to AUD exchange rate is forecast to decline to 1.95 by March 2015.

Key to pushing the Australian dollar higher is China - “even a modest improvement in economic da

ta from China, as we predict for Q4, should leave the Aussie ripe for a retracement back to 0.77-0.80 mid-next year,” say Lloyds.

1.94 is projected for mid-2016 ahead of 1.93 in the third quarter.

This will however likely be the bottom in the GBP/AUD exchange rate as Bank of England interest rate rises should aid the British pound through the latter half of 2016.