The Aussie Dollar has had a very good week this week after starting from very low levels prior to the interest rate decision. The Aussie had been weakening prior to the RBA announcement as there had been some analysts pointing to a further cut by the RBA. However, as mentioned it was highly unlikey the RBA would change policy as Glenn Stevens has been pretty consistent and clear in the RBA Minutes and recent comments.
All the data from Australia this week has been pretty good overall, particularly GDP for the Q4 being revised up, resulting in reasonable gains versus the pound and the Dollar in particular, but has also moved up against the Euro. The single currency however got a boost yesterday as the ECB confirmed improved growth forecasts and maintained current policy so gains here have been limited. We do have US non-farm payroll this afternoon and this will have a bearing on global confidence and the pace at which the Fed may continue to taper, so will likely see the Aussie move depending on how strong the jobs figures are. We do also have a lot of Chinese data out over the weekend so assuming this and US figures are ok, I feel global confidence will keep the Aussie around current levels in the short term. Next big movement likely to be next Thursday when Aussie jobs figures are published, so sellers may want to do something over the next few days, whereas buyers may want to take a punt on weak Aussie jobs figures.
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The Australian Dollar has shifted sharply against the pound today following much stronger than expected retail sales figures this morning to follow on from stronger GDP figures on Tuesday. The shift has been in excess of 1% with the high low ranging from 1.8624 to 1.8390. Some of the moves will also have come about following the ECB interest rate decision and subsequent press conference from Mario Draghi. The European Central Bank left interest rates on hold and unveiled no other measures to bolster a fragile euro zone recovery on despite forecasting low inflation for years to come. Inflation has been in what Draghi calls the “danger zone” below 1% for five months now and was running at 0.8% at the last count.
The new forecasts saw the euro zone economy growing by 1.8% in 2016 after 1.5% in 2015 and 1.2 %this year, a slight upwards revision from its previous 2014 estimate. This has lent support to the Euro, but seen a big shift back in favour of riskier currencies such as the Australian dollar, with the Aussie gaining 0.5% against the Euro back to 1.5225. The moves continue the unpredictable nature of the dollar, a trend that may will continue. This makes keeping in contact with your account manager even more important to take advantage of a strong shift in the market.
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The Reserve Bank of Australia has confirmed this week that it will keep rates steady at a record low of 2.5% but has also suggested that it wants the Australian Dollar to fall further. RBA Governor Glenn Stevens has said that the Dollar ‘remains high by historical standards’ and the movement during 2013 ‘will assist in achieving balanced growth in the economy.’ With the Aussie Dollar still high relative to its trading history this is likely to have a detrimental effect on the economy if the exchange rates stay as they are.
The RBA did say in their meeting this week that they are looking for stability concerning their interest rates so a cut is off the agenda at least in the short term. Therefore, it could be argued that they have other ideas in order to weaken the currency in the longer term. We have seen a small improvement for the Australian Dollar overnight with better than expected Aussie GDP data for the final quarter of 2013.
With 8 interest rate cuts over the last 2 years in an effort to stimulate the Australian economy and help the non-mining sector we saw the last rate cut in August 2013. However, since then even with the absence of a change in interest rates we have seen GBPAUD rates move by as much as 25 cents during this period.
Today the Bank of England meet to discuss interest rates and the ECB is due to meet at 1245pm. It is unlikely that we’ll see either bank make any change to policy but some pressure has been lumped on the ECB recently as EU inflation remains worringly low.
If you have a currency transfer to make and want to save money when buying or selling Australian Dollars then contact me directly Tom Holian email@example.com
Sterling – Australian Dollar exchange rates still remain slightly flat – Interest rates set to stay on hold for the time being – Will the AUD still weaken? (Daniel Wright)
Even with no interest rate movements and stronger than expected growth figures for Australia so far this week the Australian Dollar still appears to be finding it tough to gain any momentum against the major currencies, the on-going situation in Ukraine certainly is not helping things, but I am fairly sure that investors and speculators alike are more than likely avoiding the Australian Dollar still from comments made by the RBA (Reserve Bank of Australia) towards the latter part of 2013.
Both the RBA and the Government had commented that they would like to see the Australian Dollar a lot weaker than it is and this led to a huge sell of of AUD in a short space of time as the markets do move on rumour and speculation as well as fact.
Interest rates are currently at a 54 year low in Australia and comments from RBA Governor Stevens suggested they are not likely to get any lower in the near future, which opens the door for other economic policies to come in and weaken the AUD should it be needed.
I personally feel that the AUD still has a little further to weaken, however I would be a little wary of any dents in the economic recovery for the U.K if you are looking to buy Australian Dollars with Sterling in the near future.
Tonight (This morning if you are reading this from Oz) we have more economic data out for Australia in the way of Retail Sales and Trade balance figures which may be another potential market mover. Following that information we have the interest rate decision for the U.K from the Bank of England at midday U.K time which although should be a bit of a non event has the potential to throw up a surprise or too so it is certainly one to watch.
If you are looking to buy any major currency with Australian Dollars or you wish to buy Australian Dollars with any major currency then it may be well worth getting in contact with me directly. The company I work for has won numerous awards for our rates of exchange and customer service, I regularly have clients contact me that use other currency brokers or plan to use their bank for a currency exchange and more often than not it turns out that I can save them a lot of money.
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GBP has lost ground against the AUD over the past couple of days, moving back down towards 1.85 at the low. This move is in stark contrast to the recent trend, with Sterling having started the week putting pressure on 1.89. Sterling has continued to perform well against the AUD for some time but it does seem as if the recent spike may be nearing an end, with a lot of resistance being met on the exchange between 1.89-1.90.
Australian Gross Domestic Product (GDP) figures were released overnight and seemed to back up this theory, with figures coming in better than expected. This should help to build market confidence in the AUD, which has been clearly lacking for many months. However, despite this more positive news for the Australian economy I do not anticipate a major turnaround for the AUD in the short-term. There remains an on-going concern over the demand in China for Australia’s raw materials, a scenario that has allowed the Australian economy to flourish over recent years. There were also the comments made recently by the Reserve Bank of Australia (RBA), which confirmed they still felt the AUD ‘remained high by historical standards’. This would indicate they are happy for the AUD to lose further market value, with the hope this will improve and sustain their export industry.
If you have an upcoming AUD currency requirement and you would like to be kept up to date with all the latest market developments on this or any other currency pair, then please feel free to contact me directly at email@example.com. Alternatively, you can call our trading floor on 0044 1494 725 353 and ask for Matt and I will happily provide you with a live exchange rate.
Yesterday the RBA confirmed that they would be leaving the base
rate of interest at 2.5% The announcement was expected and caused some AUD
strength after the release but today we have seen the currency slightly weaken
against some of the majors.
This evening the we will hear what the latest revision of the
growth figures (GDP) for Q4 of last year will be. We are expecting reasonably
strong growth which may cause some AUD strength overnight.
At the moment the rates seem to be fairly range bound between
1.85/1.8650 for GBP/AUD. Unless there is a big change in the GDP
figures tonight I would expect this trend to continue. However tomorrow
the UK will have their inflation report hearings and I feel this may cause
sterling to weaken slight at some point tomorrow and could give AUD sellers
some relief and achieve slightly better levels than what is currently
If you will be looking at buying or selling the AUD we can help
you achieve much better rates than the banks here in the UK and in Australia.
Our savings can be up to 4% better and you will benefit from our expert
knowledge surrounding the currency markets.
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On Friday US economic growth figures were revised down for the final quarter of 2013. The original estimate was for 3.2% but the new figures showed just 2.4%. Such a downgrade is worrying for global investors who are usually attracted to riskier currencies. Indeed, this is the major reason for the Australian Dollar weakness over the last few few days.
The severe winter experienced by the world’s leading economy could also hamper growth in the current quarter again leading to losses of confidence for the USD and in turn the Australian Dollar. Investors have chosen to sell off the Aussie and move funds into safe haven currencies and also bonds. Official figures down under also showed that Capital Expenditure dropped by 5.2% in December over 1% lower than predicted.
Early tomorrow morning Chinese PMI data is published and with Australia so heavily reliant on the Chinese any negative news could send GBPAUD rates in an upwards direction.
The interest decision by the Reserve Bank of Australia is due out on Tuesday and with last month signalling an end to the recent interest rate cutting cycle it is unlikely that we’ll see any change in interest rates. However, any post-meeting minutes could see a weakening for the Aussie if there is mention of interest rates being cut again in the future.
Personally, I think the RBA was rather hasty in announcing an end to their recent policy of cutting rates as the Australian economy is still clearly struggling.
If you have a currency transfer to make and want to find out how to save money compared to using a bank then contact me directly Tom Holian email@example.com