Australian Dollar getting shaky due to a number of factors (Daniel Wright)

The Australian Dollar is starting to feel the pinch a little in recent trading as a number of factors are leading to a little Australian Dollar weakness.

This week so far has already given us the news that China has had a credit rating downgrade by rating’s agency Moody’s due to concerns of the spiralling debt situation over there. On top of this, investors are rushing to second guess when we will see the next interest rate change over in America and this will also be of key importance to the Australian Dollar too.

Why the rate change is so important is due to where investors will seek to hold their funds. At present Australia presents a solid interest rate compared to many other parts of the world however the U.S are slowly catching up and this is when risk perception will come into play. The closer the U.S interest rate gets to the Australian interest rate you will start to see a flow of money leaving the Australian Dollar and moving into the U.S Dollar as investors will feel that the U.S is a more stable and safer bet for their funds, so they will feel more comfortable folding funds in USD if interest rates are fairly close if not the same.

Regarding the issue with China, any bad news from China tends to be negative for the Australian Dollar as Australia exports so many goods to China so it will have an impact on the Australian economy eventually. Rising debt in China has been a concern for a long time and personally I would not be overly surprised to see Chinese debt hit the headlines on a larger scale again soon.

With this in mind we may see a tricky period for the Australian Dollar come up so there could be some great opportunities for anyone looking to buy Australian Dollars in the near future.

If you are looking to buy or sell Australian Dollars and you would like my assistance then feel free to contact me (Daniel Wright) personally on djw@currencies.co.uk and I will be more than happy to help you. Not only can the company I work for offer highly competitive rates of exchange but we are also extremely proactive in helping our clients with the timing of their exchange. If you feel you are not getting this assistance with your current broker or indeed your bank then feel free to email me directly and I will be more than happy to get in touch.

 

Will the issues surrounding the Australian property market weaken AUD further? (Joseph Wright)

The Pound to Australian Dollar exchange rate hit 1.7430 at it’s highest point during today’s session, although at the time of writing the Pound appears to have lost all of today’s earlier gains.

It’s difficult to tell which way the rate will move next, although I think that it will be underlying weakness that results in the next big move for the GBP/AUD pair as both currencies are coming under pressure for differing reasons.

China was downgraded by Moody’s (a credit rating agency) for the first time in 30 years due to slowing growth in the region although markets haven’t overreacted as a slowing in growth was inevitable.

This could spell bad news for the Aussie Dollar moving forward due to the interconnected economies (Australia and China) being quite reliant on each other. At the same time further talk of the property markets in Sydney and Melbourne overheating are surfacing again, and with a slowdown in the construction sector down under becoming a talking point as well I think there could be issues for AUD later down the line.

The Pound has also come under pressure due to the terrorist attack earlier this week, and with the election just around the corner we could see further headwinds for the Pound as we get closer to the election date (the 8th of June).

If you have a large 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 (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Australian dollar falls due to China’s credit rating (Dayle Littlejohn)

This morning China’s credit rating has been cut by Moody’s by one level to A1. A1 is the fifth highest credit rating by the well established Moody’s, and indicated that the country can meet debt requirements however are susceptible to change due to economic changes.  The reason why China have been cut is that debt levels are continuing to rise and will continue to rise in a bid to keep the economy growing. Moody’s stated “Rising Debt will erode China’s credit metrics, with robust growth increasingly reliant on policy stimulus.”

The slowdown in China is having a direct impact on Australia’s largest export Iron Ore. Fortescue, on of the largest producers of Iron ore have warned that Iron prices could continue to fall in the upcoming months. Since February Iron ore has dropped from $95 dollars per tonne to $60 dollars. With this in mind I wouldn’t be surprised to see the Australian dollar lose value in the upcoming months. Good news for Aussie buyers bad news for Aussie sellers.

However when buying or selling Australian dollars it is always important to analyse the other currency you will be converting. If you are a regular reader you will know that the brokerage I work for is based in the UK and therefore I write many articles including the pound. In regards to GBPAUD exchange rates the pound is under pressure due to the upcoming UK General Election and Brexit negotiations however I wouldn’t be surprised to see a slight rise in the upcoming weeks.

The problem I have longer term for Australian dollar buyers that will be using sterling is that any point I believe Brexit negotiations could stall due to the €100bn divorce settlement. If this occurs I expect exchange rates to fall back to the levels we become accustom to over the last 6 months (1.60).

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

Will the pound to Australian dollar rate rise or fall on the UK election?

Most reports suggest the pound is likely to rise if Theresa May wins a strong majority in the UK election on June 8th. Potentially this could see GBPAUD busting through the 1.80 level but there are of course never any guarantees with the currency markets! I am of the impression that expectations for sterling have actually been set too high and I wouldn’t be surprised to see the pound coming under pressure. I do actually feel the 1.70 level could be in focus and that after a few tricky weeks for AUD sellers the trend will now actually favour selling AUD for sterling, although of course we are unlikely to see a return to quite the same rates as we had earlier in the year.

The polls currently show Labour winning many more seats than previously expected which would see the Tory majority increase but not perhaps by as much as many believed some weeks ago. The general impression is of course a Tory and Theresa May win but, with the market pricing in a larger Tory win than expected the risk to me is to the downside, ie sterling could fall.

If you have a transfer to consider in the future then making some plans around this historic event is clear wise. We are here to help with an exchange rate I am positive will save you money over other options but also offer support and information for any transfer you might be planning. Understanding how the banks operate and the processes involved to transfer funds can save you lots of time and hassle.

My name is Jonathan Watson and I have worked as a specialist currency broker for close to ten years. If you need to move money overseas I am very confident a conversation with me will help provide some insight and could well save you thousands through a better rate and information on when to execute any transaction.

For more information at no cost or obligation please speak to me directly by emailing jmw@currencies.co.uk briefly outlining your position and preferably providing a contact number to discuss your position through thoroughly.

Thank you for reading and I look forward to hearing form you.

UK Mourns Terror Attack – AUD Market Update (Matthew Vassallo)

The UK is in mourning once again following last night’s horrific terror attack in Manchester, the worst on these shores since the London bombings.

Our thoughts and prayers are with the families of the victims involved, with the UK needing to pull together in times of such adversity.

The markets have just started to react following the disaster and as the trading day gets underway, the Pound still finds itself under pressure against the AUD.

GBP/AUD rates have dropped to 1.73, with the AUD benefiting from Sterling’s downfall. In truth, the Pound was struggling for much of yesterday, having made inroads against the AUD last week.

Sterling had threatened to make a move to 1.80, as the Pound found plenty of market support before hitting resistance under this key threshold. This negative trend was intensified yesterday, with reports surfacing that Brexit negotiations have already hit a wall already.

The UK have said they are willing to step away from negotiations, which backs up the Prime Minsters tag line that “no deal is better than a bad deal”.

The AUD gained almost two cents at yesterday’s high and the question now is whether this trend is likely to continue over the coming days?

I have continually advocated that clients look for short-term opportunities in the current market and the recent downturn is testament to this.

No one can predict exactly how a currency pair will evolve but with so much uncertainty surrounding the UK, in regards to what deal we will negotiate in our exit from the EU and upcoming general election, now is not the time to be gambling on a consistent upward trend for Sterling.

Similarly, the AUD itself is struggling again a backdrop of uncertainty. Iron Ore (Australia’s largest export) prices have fallen sharply, which is bad news for commodity and export economies such as Australia’s. The reasons attributed to this fall was put down to recent oversupply but with China’s (Australia’s main purchaser of iron ore) economy clouded in mystery, there are many variables to consider and the AUD has lost investor confidence as a result.

Whilst the current malaise is likely to restrict any major advancements for the AUD, as I’ve already alluded to investor confidence in the UK economy and the Pound, is fragile at best.

Client should look to protect their upcoming currency transfer by way of a forward contract wherever feasible and be realistic with any rates they are targeting in the current market.

If you have an upcoming GBP or AUD currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk.

GBP AUD Exchange Rates Near to 8 Month High (James Lovick)

The Australian dollar has bene impacted by new developments of late and much of it revolves around the Reserve Bank of Australia’s (RBA) thinking. Reserve Bank of Australia Governor Philip Lowe will be speaking this evening and he is likely to reflect on the state of the economy to include the Australian housing market and future interest rate policy.

There have been recent concerns as to the health of the property market down under and suggestions are being made that mortgages offered without deposits could be the trigger for something more sinister and may have some similarities to the Sub Prime crisis in the US which triggered the financial crisis of 2008. The RBA are therefore highly unlikely to want to raise interest rates and cause a potential collapse in confidence. If anything it looks to me like an interest rate cut could be just around the corner and this could result in further dollar weakness.

Developments in the US are also helping keep pressure on the Aussie considering trade agreements are all at stake. The US only recently slapped on tariffs on Canadian lumber and there is a strong chance that other tariffs may be imposed elsewhere. The Australian dollar which is perceived as a riskier currency does not perform well under these conditions.

Those clients with a GBP AUD requirement should pay close attention to the UK general election. The pound has started to soften over the last week after the very high inflation numbers from last week showed British pockets are being squeezed by a lack of real wage growth. The week data and uncertainty of a general election are likely to keep the pressure on the pound in the run up to 8th June. Clients selling Australian dollars may see a good win opportunity in the next couple of weeks. Assuming the election result is a conservative majority as widely expected then the pound could see a good rally on the 9th June after the winning party is announced. Sellers may wish to secure before this important date in the calendar

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

Factors impacting GBPAUD exchange rates (Dayle Littlejohn)

In recent months the Australian dollar has been losing ground against sterling for a few reasons. Firstly Iron ore prices, Australia’s largest export an a commodity that Australia heavily rely on has been falling in value. Last week Iron ore stockpiles at Chinese ports rose 1.7% to a record 134.25 million tons as of Friday, according to weekly data from Shanghai Steelhome E-Commerce Co. With reports suggestions China are having a slow down these stock piles continue to rise which in turn would have a negative impact on iron ore prices. Secondly the UK Prime Minister called for a snap election which also provided strength for the pound as a Conservative majority is likely which in turn would give the PM more power when negotiating Brexit.

However recent poor UK economic data has stopped the pound for making any further gains against the Australian dollar. The Bank of England have announced inflation is outpacing wage growth which is real problem for the UK public, however the Bank of England are not in the position to raise interest rates which would combat the inflation pressures.

Looking ahead I wouldn’t be surprised to see the Australian dollar continue to devalue as the FED are likely to raise interest rates in the upcoming months which would lead to a sell off of Australian dollars to buy US dollars and the also the problem with Iron ore is not going away. As for the UK as soon as the General Election is over Brexit negations will be in full swing.

The Bank of America Merrill Lynch Global Research have exclaimed Brexit negotiations could cause major swings for sterling exchange rates.  They told their clients they believe sterling’s good run is coming to an end. Personally I think it is impossible to predict how Brexit negotiations will unravel therefore gambling on this could go either way.

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 0044 1494-787478 and ask to be put through to Dayle Littlejohn.

What next for Sterling vs the Australian Dollar? (Tom Holian)

The Pound has had a mixed week vs the Australian Dollar after Australia announced another 37,400 new jobs last month compared to the expectation of just 5,000. However, although this is good news employment fell by over 11,000.

The mixed data caused a brief bout of strength for the Australian Dollar vs the Pound but since then we have seen GBPAUD exchange rates once again hit 1.75 on the Interbank level.

The Australian Dollar has been under pressure for the last two months caused by both the slowdown in the US as well as China and a fall in the value of commodities.

The problem that the Australian economy is facing in general is that both the Melbourne and Sydney property markets are still very buoyant but the economy down under is struggling particularly the mining industry.

Therefore, under a more settled environment the Reserve Bank of Australia may have looked to cut interest rates in an attempt to rejuvenate the economy but if they do this would simply just exacerbate the problem for the Australian property market.

Therefore, this is part of the reason why in my opinion the Australian Dollar has weakened recently.

Also, if we turn the focus towards what is happening politically in the UK we appear to be more settled and the likelihood is that the Conservatives will win next month’s general election due to take place on 8th June.

Typically, when the existing government wins the next election this tends to provide the economy involved with a positive boost as it gives businesses stability and more often than not this results in Sterling strength.

However, this time as there appears to be no obvious opposition to a Tory win next month so it could be argued that the exchange rate movement for GBPAUD exchange rates is already priced in.

If you would like more information or a free quote when buying or selling Australian Dollars then contact me directly. Working for one of the leading currency brokers I am able to offer you bank beating exchange rates.

Tom Holian teh@currencies.co.uk

 

 

Pound to Aussie Dollar rate continues to fall over UK economic outlook concerns, will the downward trend continue? (Joseph Wright)

The Pound to Aussie Dollar exchange rate fell into the 1.73’s earlier today as the downward pressure upon the Pound continued.

Despite still trading in the 1.70’s the GBP/AUD pair has fallen from its 8-month high as the currency is falling against all major currency pairs, with the drop against some currencies being steeper than others with GBP/EUR’s fall down to a 5-week low bring one of the standout movers.

The main reason for the softening to Sterling’s value can be attributed to the Inflation rate within the UK and its knock on effects.

The rate of Inflation has risen to its highest level since September 2013 and this is significant as it’s come at a time when UK wage growth is stagnating. Inflation is growing at a higher rate than wage growth which is likely to negatively impact consumer spending within the UK, which is an important aspect of the UK economy.

This situation looks gloomy for the Pound moving forward as the Bank of England has ruled out a rate hike in the short term future, especially with a general election just around the corner.

I wouldn’t be surprised to see the GBP/AUD rate dip below 1.70 in the short term future, unless there’s a reversal in the steep rise of living costs within the UK.

If you have a large 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 (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Where next for GBPAUD currency rates?

The Reserve Bank of Australia released their latest meeting minutes last night which showed no real change in their views on the economy or interest rates. They appear to be stuck in a familiar holding pattern with no large expectations of a move in one direction or the other. The general impression is longer term we will see the interest rates begin to rise down under but it doesn’t appear to be on the cards just yet. If you are looking to buy Australian dollars we could see some big improvements around the time of the UK election but of course there are no guarantees, we could easily see the pound lower if Theresa May doesn’t fulfill the high expectations!

If you need to buy Australian dollars with pounds then we are close to the best rates in 2017 with the possibility of rates improving further. I personally believe sterling will come under pressure in the run up to the UK election before rising after. If you have a transfer buying the Australian dollar moving on this improvement or after the election is I believe sensible. And for those selling Australian dollars to buy pounds the opposite is true. You could be looking at quite a unique opportunity to buy the currency from both angles in the next four weeks, being prepared for the movements is key!

If you have a transfer to make buying or selling Australian dollars in the coming weeks making plans in advance is sensible to try and navigate the volatility. We are in for a truly tricky period where rates could suddenly move a good few cents. As we often say when the Aussie moves it doesn’t just move a couple of cents it can move 5-10 cents in a short space of time, just like happened recently.

For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk to get a full overview of your position and all of the ins and outs of transferring funds internationally. We are here to help with the planning and execution of any deals you will need to make sure you don’t miss out should events take an unexpected turn.