Is the Australian Dollar overvalued? (Daniel Johnson)

Is there an Interest Rate hike on the cards down under?

The Australian Dollar is considered by some to be overvalued at present with the market factoring future interest rate hikes by the Reserve Bank of Australia (RBA), possibly prematurely.

I am of the opinion a raise in interest rates is not a wise move. Australia relies heavily on China purchasing it’s raw materials. A sharp increase in Australian Dollar value will obviously cause raw materials to become more expensive and could cause China to look elsewhere for it’s goods. Philip Lowe the governor of the RBA may resort to jawboning  in an attempt to talk down the value of the currency as apposed to changing monetary policy.

Sterling Woes continue

Sterling is having trouble at present, sitting at 1.63 on GBP/AUD. In order for the pound to make a significant rally we need a stable government and our stance on Brexit needs to be made clear. Politicians with their own agenda caused this situation now it is time for them to solve it. Fifteen conservative MPs recently put forward a vote of no confidence in Theresa May’s position. This does little to help the value of the pound and we are still a long way from clarity on how Brexit will pan out. This amount of uncertainty gives little hope of Sterling strength.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

AUD Continues to Make Inroads Against Sterling (Matthew Vassallo)

The AUD made further inroads against Sterling overnight, following positive employment data released in Australia.

The International Monetary (IMF) also raised China’s growth forecasts for 2018-2020 to 6.4%, an improvement of 0.4%. With Australia’s close trade to ties to China, any improvement in the Chinese economy inevitably helps boost the AUD’s value.

Sterling has lost almost two cents at its low against the AUD over the past 24 hours, with the pair now trading around 1.62.

The market perception surrounding the UK economy remains weak, with investors extremely sceptical about how Brexit negotiations will develop and the potential negative impact this will have on the UK economy. This is likely to drive market sentiment for the foreseeable future and as such, I am not anticipating a major improvement for the Pound any time soon.

Investors will also be looking towards any developments between the US & North Korea, which is obviously a destabilising global situation.

This is likely to drive global currencies and commodity based assets such as the AUD, could be amongst the hardest hit. Global fear generally means investors will start to pull funds away from riskier, potentially higher yielding currencies such, as the AUD and return them to safer havens such as the CHF or historically the USD.

This means that the AUD could be inadvertently weakened by any increase in the rhetoric surrounding the Korean Peninsula, so clients may wish to consider this ahead of any AUD currency exchanges this week.

Whilst the recent economic data emanating from Australia has been fairly strong, Sterling should find some support above 1.60 over the coming days.

If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

GBP/AUD Forecast Difficult to Judge (Ben Fletcher)

Sterling dropped today after inflation defied expectations and held at the previous level of 2.6%. There was hopes that inflation may rise up to 2.7% however it didn’t happen and the markets responded with Sterling losing a cent against the Australian Dollar. Whilst Sterling has dropped today, in my opinion it didn’t quite go as far as I thought it might. This is due to some of the concerns with the Australian economy which does suggests the Aussie strength is dwindling.

The number of new builds expected in the next few years in Australia looks set to fall which has an effect on the price of housing and the amount of jobs across the country. There is low inflation levels in Australia and despite the Reserve Bank of Australia suggesting they may increase interest rates to 3.5% in the next few years, they wont before inflation rises. This suggests that whilst the GBP/AUD is currently sitting around the mid 1.60’s if good news for Sterling becomes apparent the rate could rise sharply to 1.70.

Unemployment Tomorrow

In the short term there will be Unemployment Data in the early hours of Thursday morning which is expected to show July’s rate has stayed the same as June, however any deviation from this could have a positive or negative effect on rate depending on the direction. Currently with Sterling struggling and on a negative streak I do think there is more chance of the rate falling than going up.

If you do have a question with regards to my forecast or have a different question please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me Ben Fletcher at brf@currencies.co.uk

 

Where next for the Pound vs Australian Dollar? (Tom Holian)

The Pound vs the Australian Dollar has marginally crept up overnight after the Reserve Bank of Australia suggested that the construction sector down under is beginning to show signs of a slowdown. If this carries on it could result in a lot of job losses going forward which is likely to be detrimental to the Australian economy.

According to a report from BIS Oxford economics they have also forecast as fall of 31% in the number of new properties being built over the next three years and this could be the biggest drop in almost twenty years for the sector.

Australian household debt has also seen an increase to as much as 190% of household income which is clearly far too high.

This is a big concern for the RBA who have a difficult decision concerning interest rates and which direction they will move them in.

It could be argued that an interest rate hike is necessary to cool the already over-heated property market but with household debt rising an interest rate hike could cause big problems for the economy.

Therefore, the RBA have been rather cautious recently with monetary policy and have used the practice of ‘jawboning’ which is essentially suggesting something may happen without actually doing anything.

Overnight tonight Australian unemployment data is due out with the expectation for 5.6% so anything different could result in volatility for Sterling vs the Australian Dollar.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.

A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Will the Pound fall this month against the Australian Dollar? (Tom Holian)

We have seen a relatively stable period this month for GBPAUD exchange rates but could this change going into next month?

At the moment the markets have been quiet whilst many political leaders take their summer break but when things get started in September it is likely that the Brexit negotiations will once again begin to dominate the headlines.

When the snap general election was called back in Easter Sterling vs the Australian Dollar was trading above 1.70 but since then we have experienced both a hung parliament as well as the beginning of the Brexit talks.

Both have caused big falls in Sterling against all major currencices including against the Australian Dollar.

Growth forecasts for the UK have been downgraded both for this year and next year and this week’s Trade Balance figures for the UK have showed a huge fall in investment by businesses who are stalling their projects owing to the uncertainty as to what may happen with Brexit.

Longer term I expect the Pound to struggle and although in the short term I expect to see some small periods of gains I think they will be limited.

Therefore, if you’re considering sending money to Australia it may be worth doing it during this month.

If you have a currency exchange to make whether it be buying or selling Australian Dollars and want to save money on exchange rates compared to using your own bank then feel free to make contact with me directly via email.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident of being able to offer you both better rates as well as keeping you updated with various market movements.

For a free quote email me directly Tom Holian teh@currencies.co.uk

Aussie slightly lower on RBA comments, where next for GBPAUD exchange rates?

The Australian dollar is a little lower this morning as the Reserve Bank of Australia Governor Philip Lowe reiterated that Unemployment was a key factor in any decision to raise interest rates and that for now rates would ‘remain steady’ at 1.5%. The raising and lowering of interest rates is a huge factor driving exchange rates and these comments alongside global events have seen the Aussie a little softer. If you are buying or selling Australian dollars then making some plans around future trends is key to securing the best rates.

Global events are always something to bear in mind with the Australian dollar but more so at present. With the Australian dollar benefiting and suffering as global sentiments on markets rise and fall the latest developments with North Korea and the US dollar are key. Essentially the US dollar is rising because investors are concerned about the prospect of a nuclear war. As the Australian dollar is used by investors because of its high yield (higher interest rates) in times of uncertainty likes this investors will pull their funds and look to invest in ‘safer’ shores, eg the US dollar.

At present this is not overly pronounced, we are only talking a couple of cents off the more recent levels. However any deterioration in the North Korean situation could easily the AUD lose value sharply. There is some important US economic data due at 13.30 UK time today which might lead to some swings on USD/AUD which would in turn influence GBPAUD exchange rates.

All in all I expect the pound to continue to struggle but in the absence of any new fresh bad news and a slightly more dovish RBA, we could see GBPAUD gently drift higher. Next week’s UK Inflation data, Retail Sales, Unemployment and then Australia’s Unemployment data could all be market movers. If you have a transfer now or in 6 months, making some plans around up coming events is key to getting the most for your money.

Whether on amounts of 10,000 GBP or multi-millions, if you have a transfer we can secure preferential commercial rates of exchange and offer practical assistance with the timing of when to lock in a rate.

Thank you for reading and for more information please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

Governor of Australian Central Bank Speech (Ben Fletcher)

In the early hours of tomorrow morning Philip Lowe who is the Governor of the Bank of Australia will speak providing his latest thoughts on the Australian economy. The RBA recently announced they plan to increase interest rates upto 3.5% over the next few years, which would be a 2% increase.

The speech will provide the thoughts of the Governor and could provide an indication as to when the first hike may be. Inflation is low in Australia and its unlikely until that starts to rise there will be little movement. In my opinion should there be a interest rate hike in the near future in Australia the GBP/EUR rate could start to move towards the 1.60 level if not lower. Sterling is massively struggling with little sign of strength and a Aussie hike would only add further momentum.

There should also be a focus on what the US do over the next few months as a period of uncertainty does not appear to be far away. The US interest rate hikes had started to help the GBP/AUD rate to rise as investors moved funds from Australia to a more secure US Dollar. However if the US for example were to go to war with North Korea, the currency may start to be weaker as investors look for certainty. Australia is one of the only high interest rate economies in the leading markets and could receive even more investment. In short I can see a lot more chance of 1.60 than 1.70 on the GBP/AUD.

If you do have a question with regards to currency markets I am well positioned to be of assistance to you. Please feel free to send me a brief email outlining what you’re looking to do and I will be happy to discuss with you. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at brf@currencies.co.uk

Sterling Finds Support Against the Australian Dollar before Inflation Data (James Lovick)

GBP AUD exchange rates have picked up today with levels breaking 1.65 for this pair. The pound has largely remained under pressure after the Bank of England held interest rates last Thursday and reduced the UK economic growth outlook going forward. This had the direct impact of a fall in the price of sterling across the board including the Australian dollar. The pound has however found a degree of support today.

Selling Australian Dollars?

There is a very good opportunity for selling Australian dollars into pounds at present and those clients with a pending conversion to make would be wise to get in touch to try and maximise on the rates of exchange which are currently available. Rates for selling Australian dollars are currently 10 cents better than they were in May which means a AUD200,000 transfer will currently generate an extra £7000 based on today’s market value. GBP AUD may be at a turning point however and the pound appears considerably more supported after today’s session.

The very recent escalation of tensions between the US and North Korea are also likely to impact on Australian dollar exchange rates. Things would need to worsen further but any change could see a flight to safety to the US dollar away from the perceived riskier currencies like the Australian dollar. We’re not there yet but it is a reason to consider taking the risk out of the exchange particularly for those clients selling Australian dollars and moving into other currencies.

We trade currency for a number of reasons to include property purchase and sale, salaries paid in other currencies, inheritances, emigration or simply moving savings. If you have requirement for any reason then please get in touch to discuss your requirement and the options available to you.

Australian Consumer inflation expectations will be watched tomorrow for clues as to where future monetary policy down under will be heading. Reserve bank of Australia’s Governor Philip Lowe will be speaking on Friday where he may also offer come guidance as to where the Aussie may be heading next.

If you would like further information on Australian dollar Exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

Could Sterling face further losses against the Australian Dollar? (Daniel Johnson)

Inflation a growing concern for the UK

The pound continues to weaken against the Australian dollar. The latest UK interest rate decision did the pound no favours. Interest rates closely linked to inflation. Inflation is  a major concern for the UK at present and at one point threatening to breach 3%. We have now seen a a drop to 2.6% and many believe this is a negative for the economy. I do not share this view, inflation is only beneficial if average wage growth is close to being in sync, it is currently some way behind inflation at 1.8%. If consumers are not prepared to pay over inflated prices for their goods and services this is when growth dwindles and there is the potential for a recession.

Their have been rumours circulating the Bank of England (BOE) could hike interest rates should inflation rise above 3%, so the fall to 2.6% was seen as negative to investors and the pound fell in value as a result. The previous monetary policy committee (MPC)  vote came in at 5-3, with three members in favour of a hike. Kristin Ford has left the MPC however, and has been replaced by Silvana Tenreyo who voted to hold rates. The vote now at 6-2 did little to help Sterling against the Euro.

RBA fear the strong Aussie could damage exports

Down under the strength of the Australian dollar is a concern due to the heavy reliance on trade partners buying Australian raw materials. Reserve Bank of Australia (RBA) governor Philip Lowe will know doubt attempt to jaw bone and talk down the value of the Aussie rather than making a  more drastic change to moneatry policy. I doubt jawboning will have the desired impact.

Hans Redeker from Morgan Stanley recently stated “We expect the AUD to continue to move higher in the short-term as yield-seeking behavior continues,”

The high interest rates  offered in Australia are currently very attractive to the investor, especially considering the weaning of the US dollar of late.

In order for the pound  to rally we need a stable government and the stance on Brexit to be made clear. A rise in inflation could force the BOE’s hand on a rate hike, but this it is not a healthy move for the economy and a long shot if you are hoping for this to bolster Sterling against the Aussie.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Will GBP/AUD return to its March lows and trade in the 1.50’s once again? (Joseph Wright)

Unfortunately for those planning on exchanging Pounds into Australian Dollars in the short term future, the Pound appears to be on track to return to it’s post-Brexit vote lows.

It was back in March when GBP/AUD broke below 1.60 before recovering. The Pound is coming under pressure against most major currency pairs at the moment with just a few exceptions such as the Swiss Franc.

For those with a need to exchange the Pound into Aussie Dollars its worth noting that the Pound hit fresh lows against the Euro during today’s trading session, so if the Pound to Aussie Dollar rate is to follow suite the pair have another 5 or so cents before that happens.

At 11am tomorrow there could be movement between the GBP/AUD pair as an Inflation Report Hearing in the UK will take place, and due to the inflation levels in the UK currently under the microscope due to the fall in the value of the Pound I expect investors to listen closely for hints at future monetary policy in the UK. I wouldn’t completely rule out an interest rate hike this year if need be and talk of one could provide the Pound with a much needed boost.

On Thursday afternoon there will be a GDP estimate figure for the past 3-months to July, and this release comes after a bout of data on Instruction and Manufacturing which could also impact Sterling/Aussie exchange rates should the outcomes deviate greatly from expectations.

If you have an upcoming currency requirement involving the Pound and Aussie Dollar, do feel free to get in touch as I’ll be happy to discuss our commercial exchange rates with you, along with my opinion on potential future price fluctuations. You can email me an outline of your plans to jxw@currencies.co.uk or even provide with a telephone number if you wish to discuss it as soon as possible.