RBA Prepare for a Rate Cut Next Week (Ben Fletcher)

The consumer prices across the whole of Australia’s cities were looking particularly low with only a few places reporting inflation above 1.0%. This has essentially put the nails in the coffin for the RBA and they are once again looking likely to act.

The Reserve Bank of Australia is mandated to maintain an inflation level of 2-3%, currently the rate has remained below 2% for 18 months. What this means for AUD sellers is that the rate could move significantly against you as a rate cut will weaken the AUD. Alternatively if you’re a buyer of AUD then you may have a well-received window of opportunity after major recent losses.

Sterling Could Have its Own Problems

A week after the Reserve Bank of Australia decision the Bank of England will decide the UK’s interest rate. After the Brexit victory it has always been on the cards that should the economy slow down there is a real chance of a cut. There has been some data supporting a slowdown for the region; however there is also data suggesting the effects haven’t fully taken impact.

The decision will be made on the 4th August and if Governor Mark Carney along with the central bank do cut rates then Sterling like the AUD may fall. Whilst some analysts believe the rate cut is priced in I don’t think it is completely. Therefore if there is a cut I would not be surprised to see the GBP/AUD rate fall back towards the 1.70 level.

The AUD rate cut could come a few days earlier than the Bank of England’s decision so Wednesday next week could represent a good AUD buying window with rates nearer the 1.80’s.

As a trader in a currency brokerage I am able to help you achieve the best rates possible, whilst also assisting with the timing of a transaction to make sure you get the most for your money. If you do have a currency requirements please feel free to send me Ben Fletcher an email at brf@currencies.co.uk

Will the RBA cut interest rates next week? (Tom Holian)

The Australian Dollar has come under a little bit of pressure recently against the Pound as inflation results for the Australian economy came in overnight at 1% compared to the expectation of 1.3%.

Inflation has been struggling down under recently and with prices not rising this is likely to impact the health of the economy going forward. The target for Australia is between 2%-3% and this is only the third time since 1996 that the target has not been met.

Usually falling inflation results in a central bank looking to cut interest rates and this could happen when the Reserve Bank of Australia meets next week on 2nd August.

With interest rates at historically low levels in Australia any further interest rate cuts could cause the AUD to weaken which is good news for anyone looking to buy Australian Dollars with Sterling.

However, also next week the Bank of England meeting takes place on 4th August and there is a wide expectation that the BoE may look at cutting rates themselves or even increasing the volume of Quantitative Easing, both of which could be detrimental to the strength of Sterling.

If you’re concerned about what may happen to GBPAUD exchange rates over the next few weeks it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

Interest Rate Decisions both sides of the pond to cause volatility on GBP/AUD

Australian Consumer Price Index (CPI) data came in over night and showed a drop from 1.3 to 1.0. Quite a significant drop, CPI is a measure of inflation and is a key factor in any interest rate decision. The sharp fall could well force the Reserve Bank of Australia’s (RBA) hand. The next Australian Interest rate decision is 2nd August, if there is a cut it could create a small window of opportunity for AUD buyers.

The Bank of England (BOE) are due to make a an interest rate decision on 4th August and it is widely anticipated there will be a cut from the already record low of 0.5% to 0.25%. This is common knowledge so I would not expect a huge fall in Sterling value as the cut is probably already factored into the market. What could cause a significant fall is if Mark Carney the Governor of the BOE announces Quantitative Easing (QE). QE is essentially pumping money into an economy in order to stimulate growth. Carney has £150bn at his disposal and if QE is implemented expect Sterling to drop in value.

If you are buying AUD, why not wait until after the RBA decision on 2nd August and then trade before 4th August BOE decision.

If you have a currency trade it is vital to be in touch with an experienced broker. The timing of your trade is key during such a volatile  times, If you have a veteran broker on board he can keep you up to date with what is happening in the market to help you make an informed decision. If you would like me to help with your trade I will be happy to help. Let me know the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the UK and as such I am in a position to beat nearly every competitors rate of exchange. You would be looking at around a 4% saving in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog and I look forward to hearing from you.

Short term GBPAUD forecast (Dayle Littlejohn)

In the early hours of tomorrow morning (1.30am UK time), Australia are set to release their latest Consumer Price Index numbers. Consumer Price Index also known as inflation  has a major impact on interest rates. When inflation is on the rise central banks look to raise interest rates. On the other hand when inflation falls this can indicate interest rate cuts are on the horizon.

We are expecting to see inflation numbers drop tomorrow to 1.1% from 1.3%. I believe if inflation levels drop below 1.1% this could give the Reserve Bank of Australia a good reason to cut interest rates on the 2nd August.

The next UK interest rate decision is on the 4th August. The Bank of England’s key members including the Governor Mark Carney have hinted a rate cut is on the horizon. I also believe further stimulus (quantitative easing) could be added to the UK economy which would devalue sterling.

We could see major spikes between GBPAUD early next month and its important to be in the position to be able to act. The currency company I work for has won numerous awards for exchange rates therefore it enables me to trade Australian dollars at rates better than other brokerages and high street banks. I would recommend sending an email with a brief description of your requirements and your timescales (this is very important, the length of time you have will change your options) and I will email you with my strategy and the process of using our company drl@currencies.co.uk.

Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn

 

Pound strengthens against the Australian Dollar after Friday’s falls (Joshua Privett)

We begin the week with GBP/AUD rates operating between the normal boundaries of little notable movement, with the Pound recording just over a cent of gains against the Australian Dollar from where we began the day.

The final two weeks of each month are normally devoid of economic data, so this is traditionally the ‘quiet’ period of the month. Yet due to the ripples caused by the Brexit result, whilst rates seem range-bound between 1.74-1.77, there is still significant movement each day. With less liquidity in financial markets this is largely inevitable.

Rates rose today with news that financial markets in the UK had stabilised following the poor business confidence figures released in the UK on Friday. Even BBC commented on the bizarre relationship that whilst the Pound strengthened stock markets in the UK fell. But this is simply another lesson that markets operate on expectation – if the market drops lower than expected, then much of the weakness already priced into the market will be released and the Pound will be allowed more breathing room.

The late announcement today of talks for a free trade deal with China so soon into the new Government’s efforts to re-stabilize the economy also helped to shore-up confidence. This strength may even filter into tomorrow morning’s trading with Asian markets still yet to trade on the back of the news as they were closed when the information was released.

It is difficult to gauge how markets behave during these quieter periods, but often movements are minimal andI think we can expect that quieter periods, with the Brexit out of the spotlight will allow some of the pressure on the Pound to be lifted.

Some further opportunities for AUD buyers may present themselves on Thursday morning in the UK with the release of inflation figures for the Australian economy overnight – market expectations are for a fall from 1.3% to 1.1%, and this confirmation may see the Dollar weaken further (adding fuel to the argument that there may be an interest rate cut next month) making it a cheaper prospect.

I strongly recommend that anyone with an Australian Dollar requirement, whether buying or selling, should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return. I have never had an issue beating the rates of exchange offered elsewhere, so a brief conversation could save you thousands on your transfer.

Who will cut interest rates first, the RBA or BoE? (Dayle Littlejohn)

For Australian Dollar sellers buying sterling, the UK’s referendum has provided the best rates seen in two years. However will this improve? I believe it all comes down to which bank cuts interest rate first. The Reserve Bank of Australia have been flirting with cutting rates for months however the latest minutes didn’t give any hint that this could be as early as August 2nd.

An important economic data release to look out for this week for is the latest Consumer Price Index (inflation) numbers for Australia set to be released at 2.30GMT. The consensus is for a fall to 1.1% from 1.3% and if this is the case you could see the Australian Dollar weaken against sterling and a drop below 1% could give the RBA a reason to cut rates.

As for the Bank of England their next meeting is August 4th and I believe there’s a strong argument rates could be cut. The latest release of PMI released last Friday showed a major contraction and the lowest levels since April 2009. Some economists are predicting a recession is just around the corner and I have to agree.

If you have a currency exchange to make involving the Australian dollar, it makes sense to explore all of your options. Here at Australian Dollar Forecast we understand every client’s situation is different, therefore we devise a strategy that meets your needs and requirements. As for exchange rates we can beat any UK brokerage or bank and I look forward to proving this to you. The clients I deal with are high net individuals, businesses and property buyers / sellers that are trading 10,000 Australian dollars to the multi millions.

Feel free to email me with the reason for your transfer (transfer of wages, property purchase) and I will respond with my forecast and the process of using our company. drl@currencies.co.uk.

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

Uncertain week ahead for Sterling Australian Dollar exchange rates (Tom Holian)

Sterling Australian Dollar exchange rates have dropped by as much as 30 cents since the Brexit vote but have started to creep up slowly since the appointment on new Prime Minister Theresa May.

However, yesterday’s data release for the UK’s Purchasing Manager’s Index showed a fall in economic activity to its lowest level since 2009.

The figures came out at 47.7 and with anything below 50 represents contraction the data was rather alarming and this caused Sterling exchange rates to fall against all major currencies.

On Wednesday morning this could be the most volatile day all month for GBPAUD exchange rates.

We begin the morning with inflation data for Australia and if worse than expected this could influence the RBA to cut interest rates at their next meeting and therefore you would expect to see AUD weakness vs Sterling. The next meeting for the Reserve Bank of Australia is due on 2nd August.

However, only a few hours later the UK releases UK GDP data for the second quarter.

As this data will include the Brexit period I think this could come out worryingly low so any gains for Sterling could be quickly eroded by the announcement.

Indeed, with manufacturing and industrial production data in the UK at 5 year lows during the second quarter the GDP could highlight the negative view of the economy at the moment.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directy teh@currencies.co.uk

I look forward to hearing from you.

 

 

 

Weak business data weighs on Sterling’s value, with further GBP weakness now likely (Joseph Wright)

Earlier this morning the UK released it’s first set of financial data since the shock announcement of the ‘Brexit’ decision.

The news released doesn’t bode well for the UK economy in the short to medium term, or Sterling strength for that matter as PMI figures for both Services and Manufacturing have shown a decline from the previous figures, with both demonstrating a contracting economy with the Manufacturing figures coming out worse than expected by analysts.

I put the declines down to simple uncertainty, with many tentative to put funds into UK business whilst the countries future remains unclear.

Moving forward I expect data such as this mornings new release to continue to weigh on the Pounds value, and I’m not expecting to see Sterling trading above 1.80 once again anytime soon, perhaps not even this year. Sterling sellers hoping to see the levels of 2.00 once again may be waiting for a long time, although a further cut to Australian Interest Rates could push the Pound up comparatively although the UK is also likely to cut interest rates, and that could occur as soon as August the 4th which would likely cancel out any potential gains for the Pound against the Aussie dollar anyway.

For Aussie dollar sellers, it’s hard to tell when the best time to trade will be as we are around 5-6 cents above the lowest level hit this year. For those not looking to take any risks it may be idea to take advantage of what are almost 3 year highs for the Aussie dollar.

If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me (Joe) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

 

 

Pound prediction against the Australian Dollar (Tom Holian)

If you’re moving to Australia or thinking about sending money from Australia to the UK then the chances are that you’ve been reading this site for quite some time. However, if you haven’t come across us before then welcome and I hope you find the following information useful.

Sterling has had a torrid time vs the Australian Dollar since the Brexit vote and the Pound has fallen by over 30 cents since the recent highs just one month ago.

However, since the new Prime Minister Theresa May has taken over this has helped the Pound to recover vs the Australian Dollar.

Politically the UK was in a state of flux following the Brexit vote when David Cameron announced his resignation.

Following the news there was due to be a leadership battle which was going to last for 9 weeks but with Andrea Leadsom withdrawing herself earlier on than expected this settled the UK and therefore Sterling saw some gains against all major currencies including against the Australian Dollar.

One of the biggest factors in determining how the Australian Dollar performs is when important data is released in the US. This often impacts the value of the AUD as it will determine global risk appetite.

Tomorrow afternoon the US announce GDP data for the second quarter of 2016 and any signs of positive growth could strengthen the Australian Dollar against Sterling but if the data comes out lower than the expectation then we could see the AUD weakening against the Pound providing a good opportunity to buy Australian Dollars with Sterling.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

 

Will the Pound continue to get stronger against the Australian Dollar? (Joshua Privett)

Since the beginning of last week the Pound has been enjoying a strengthening trend against all currency pairings, including the Australian Dollar. Like the effects of the Brexit on the Pound, the momentum from this comes from politics.

Last Monday it was announced that a two-month leadership contest for a new Prime Minister in the UK will be avoided, and clearly markets were impressed by the quick turnaround. By Friday a new Prime Minister had been sworn in, a new government formed, and a new Ministerial position created to manage the UK’s exit from the EU, but in a gradual manner.

All the above served to make the Pound stronger, with markets realizing that there is now a buffer which will allow them to act with some degree of normality in the UK until next year.

However, the positive news on the Pound has been muted against the Australian Dollar, which is enjoying higher demand, both for its currency and in its stock markets.

With an interest rate over there of 1.75%, which for Australia is deemed ‘historically low’, but compared to the UK, which is flirting with lowering theirs to 0.25%, the disparity in demand between the two is understandable.

Economics is also playing some part. This morning produced a mixed bag for the UK, with a dramatic reduction in public borrowing, but also an equally dramatic fall in retail sales figures for the UK. It seems that despite the seasonal weather, families saving for the summer months have kept wallets closed and reduced spending activity for the UK and hurt the Pound’s value in doing so.

So for the past few days rates have largely been in limbo. There are a number of political forks in the road which may affect the value of the Pound. Will the Scottish call for another Referendum? How will trade negotiations go? Will more countries such as Australia welcome the ability to create a trade deal with the UK? So watch this space.

To remove all risk, whether buying or selling Australian Dollars, moving sooner rather than later secures a rate of exchange you are either happy with for buying Australian Dollars, or more likely selling. The current trend seems to be a stabilizing one on the Pound.

If you would like to discuss the options open to you for your transfer, to explore current GBP/AUD forecasts in further detail, or simply to hear a live, competitive quote, I can be reached on +44 1494 787 478 – ask a member of my team for Joshua.

jjp@currencies.co.uk