GBP/AUD no longer testing 1.80, is a move down into the lower 1.70’s now likely?

After testing the 1.80 mark for a number of weeks, the Pound has recently slipped from these high levels and now the pair are trading closer to 1.75. The 1.80 level does appear to be a resistance and for some time now Sterling sellers would have been best to target their transfers when the mid-market level is as close to 1.80 as possible.

Uncertainty surrounding the UK governments Brexit plans and whether they will be agreed upon in time is behind the drop in the Pound’s value. The fall hasn’t just been against the Aussie Dollar but also against many other major currency pairs with the fall against the US Dollar being one of the most dramatic, as it’s hit a 10-month low.

This week it’s emerged that the Australian jobs market is alot healthier than expected after a substantial amount more jobs were created in May than expected. This has boosted the Aussie Dollar as up until this week the average amount of new jobs was just 16,000 monthly.

One potential downside for the Aussie Dollar is the lack of movement with regards to monetary policy, as the Reserve Bank of Australia doesn’t plan on amending interest rates this year.

With many major economies beginning to make the hikes the Aussie Dollar may lose value as investors opt not to hold funds in AUD.

With little economic data out of Australia for the remainder of the week, our readers have time to get in touch and plan around transfers next week. Do feel free to get in touch if you would like to discuss next week’s economic data releases and how they could impact the rates.

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.

The reasons why the Pound could climb against the Australian Dollar this month (Tom Holian)

Sterling vs the Australian Dollar has remained in a relatively tight range recently although GBPAUD rates have been trying to hit 1.80 on a number of occasions already this month.

In my own opinion I think it is only a matter of time before the Pound breaks past 1.80 as the Australian Dollar is coming under a lot of pressure recently.

The latest report from China in terms of GDP data has shown a slowdown to 6.7%, which although this is clearly much higher than that of any of the western economies this has caused concern for the world’s second largest economy and this has caused the Australian Dollar to weaken against a number of different currencies including the Pound.

The US has been threatening China with a Trade War and has put in potential plans to raise tariffs of US$200bn to come into play in the next few weeks.

Whether or not this is simply the US flexing its financial power or it will take place is anyone’s guess at the moment but the uncertainty it has caused has made global investors move money away from riskier currencies and towards the US Dollar and this has in turn harmed the value of the Australian Dollar.

Earlier this week the Reserve Bank of Australia released the latest set of minutes and they confirmed that interest rates are likely to be kept on hold for the time being.

With the US planning further interest rate hikes as well as the UK considering doing the same as early as 2nd August this is another reason why we could see the Pound moving in an upwards direction against the Australian Dollar in the next fortnight.

If you have a currency transfer involving Australian Dollars and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing form you.

Tom Holian teh@currencies.co.uk

GBPAUD remains range bound

Over the last 30 days GBPAUD exchange rates have fluctuated in the higher 1.70s with minimal movement as both currencies seem to have been devaluing at the same pace. At the latest Reserve Bank of Australia meeting officials showed concern in regards to the trade tariffs that have been imposed on China by the US. The Australian know that a slowdown in China will have an impact on the Australian economy. Furthermore the International monetary fund have waded into the debate and announced an all out trade war will end up costing the global economy over $430bn.

UK Prime Minister Theresa May is under extreme pressure and last night threatened Tory rebels that she would call a general election if the amendment in regards to the customs union went through the Commons. The uncertainty of another General election would certianly weigh on the pounds value. Furthermore Governor of the Bank of England Mark Carney also failed to help the pounds value yesterday, as he stated a Brexit no deal would mean the Bank of England would have to rethink their future plans.

At the end of the week, UK politicians break for the summer holidays, therefore I expect Brexit related news to go quiet for a few weeks. All eyes will turn to the Bank of England’s interest rate decision early August. The market has been pricing in a hike, however I expect the Bank of England will fail to deliver which will mean sterling takes a hit. Therefore I wouldn’t be surprised to see GBPAUD fall back towards the mid 1.70s over the next month.

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.

Australian Dollar weakens following RBA meeting minutes

Tuesday saw a fairly poor performance by the Australian Dollar against most major currencies, following the release of the RBA (Reserve Bank of Australia) meeting minutes from their last interest rate decision.

The minutes will basically show what was discussed at the meeting and how the RBA came to various decisions and i’m afraid the tone was fairly negative when reading through discussions and future fiscal plans.

The main areas of concern are the on-going trade wars between Donald Trump and China, as many regular readers of this site will be aware Chinese economic performance is fairly crucial to the performance of the Australian economy and the Australian Dollar. Not only do China import a huge amount of goods from Australia but they Chinese tourists make up a fairly large percentage of tourism in Australia.

The large sum of household debt at present in Australia is also of great concern to the RBA. Household debt is currently at worrying levels and what this means is that until this starts to drop back off it will be very difficult for the RBA to raise interest rates, and they did put a nod to this in the minutes.

Should they raise rates then we may see a large quantity of households go into default in Australia which would only escalate the economic problems even further, it does now appear that unless things improve then will not be seeing an interest rate hike for the foreseeable future which will more than likely hold the Australian Dollar back against other major currencies.

An interest rate hike is generally seen as positive for a currency and with other areas around the globe slowly raising their interest rates the Australian Dollar is in danger of being left behind.

If you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like assistance with developing your strategy then you are more than welcome to get in touch. I have been helping clients move money internationally for over a decade and will be more than happy to have a chat with you about your specific needs.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will get in touch with you personally.

Trade Wars and Brexit dictate GBP/AUD (Daniel Johnson)

GBP/AUD – GBP/AUD currently remains range bound between 1.75-1.80. The outlook for both currencies is not necessarily the best. The Australian Dollar will find it hard to find a momentum due to the ongoing trade war between China and the US. Australia has a heavy reliance on China purchasing it’s exports, particularly iron ore. The tariffs imposed by the Trump administration are quite severe and with China threatening to match US tariffs Dollar for Dollar this will hit both economies hard and in turn the Australian Dollar.

During times of global economic uncertainty investors tend to avoid commodity based currencies in favour of safe haven currencies. Despite the US initiating the trade war, the US Dollar is proving to be the destination of choice. 10yr treasury bonds currently offer the best returns seen in years and the Federal Reserve have the intention to hike interest rates a further two times by the end of the year.

I feel the trade war with China could be sustained despite the US holding the majority of the cards.

From the UK side, Brexit negotiations will be key the the value of Sterling. Theresa May’s Brexit proposal has taken criticism as it goes against how Brexit was sold to the public.

The proposal includes a free trade deal for goods and agricultural products. This would essentially keep the UK’s rules and regulations aligned with those of the EU. This would allow trade in goods to flow freely and the Irish border would remain open.

The proposal for services however will be different. The UK would like to take back control of services, particularly the financial sector. Services make up 80% of UK GDP. This would result in more barriers for companies’ trading aboard.

The risk of course is that financial services will move abroad. This is a serious concern as the tax income from the financial sector is huge. May intends to reform the existing equivalence regulation where temporary customs union access is granted, but can be removed at anytime. This situation does not fill me with confidence.

Merkel has apparently agreed to a deal behind closed doors.

If the trade war escalates then we could see GBP/AUD breech 1.80 although I do think this would be a long shot. aim to trade in the 1.79s if you have an Australian Dollar requirement.

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.

 

Australian dollar volatile under Trade War and Chinese economic data releases…

The Australian dollar will take its cues early next week from a series of economic data released in China, notably Chinese GDP (Gross Domestic Product) data released very early in the morning on Monday. News from China is very important on the Australian economy and there is no bigger release than GDP since it shows how well the respective economy is performing.

This news is all the more important given the current Trade Wars between China and the US, we are currently facing renewed prospects of increased tariffs which would in most eyes only serve to have a negative effect on the Chinese economy. Surprisingly, against this backdrop we have seen a series of economists for Reuters predict the Chinese economy will actually grow at a slightly faster pace this year.

This is because whilst the Chinese economy could be negatively impacted by the Trade Wars, the momentum in their economy and also the moves by the PBOC (People Bank of China), the Chinese central bank, to stimulate the economy, will all help to stimulate growth in Asian dragon. This will all help to see the Australian stronger if it happens and it will make an interest rate hike down under all the more likely.

Later next week the release of Australian Unemployment data will also prove very interesting for Australian dollar exchange rates, clients looking to buy or sell might find themselves with fresh information to move the rates. Of particular interest would be whether the Unemployment level is likely to have increased to 5.6% versus the previous levels of 5.5%. This would make it less likely we will see the RBA (Reserve Bank Australia) putting themselves on a path to hiking in the future.

The week could start strongly for the Australian dollar if the economic data from China is supportive of the Australian economy, however, it might weaken towards the end of the week if the news is less positive. Into the mix we have to put Donald Trump and the Trade Wars, with his comments at Nato and also in the UK upsetting many, his upcoming visit to Putin next could see some volatility on exchange rates as the market tries to gauge what happens next.

If you are considering any purchase or sale of Australian dollars, next week could be very important as a series of data and news threatens volatility on the currency. To discuss strategy relating to any positions, please don’t hesitate to get in touch with me directly on jmw@currencies.co.uk.

GBP/AUD – Sterling stands strong depsite Davis resignation (Daniel Johnson)

GBP/AUD – The progress in Brexit negotiations is key to the value of GBP/AUD. The resignation of chief Brexit negotiator David Davis does not bode well for Sterling.

After Theresa May released her intentions for Brexit David Davis announced he thought the deal was “unworkable” and has subsequently resigned. Angela Merkel has also stated the deal is unworkable.

Despite this the Pound remained robust against the Aussie and we did not see any significant falls. This can be attributed to positive UK data, namely Services Purchase Manager Index (PMI) which came in at 55.1, the highest since October 2017. This is significant as Services makes up around 70% of UK GDP.

There is also of course the ongoing trade war with China and the US which is certainly putting off investors moving to the Australian Dollar. Commodity based currencies are not as popular in times of global economic uncertainty. China is the biggest purchaser of Australian goods and services and Chinese growth will be hindered by the trade war. This in turn will hit the Australian economy.

Despite the US initiating these trade wars the US Dollar continues to gain strength as investors seek a safe haven currency with high returns. The Fed has hiked interest rates on two occasions this year ant there is set to be more. Ten year treasury bonds currently have the highest returns in over four years.

GBP/AUD is currently range bound between 1.75-1.80. AUD buyers aim to move when interbank hits 1.79.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk.

Thank you for reading. Daniel Johnson

 

 

Australian Dollar Poised for Volatility after US Tariffs are Enforced (James Lovick)

The Australian dollar is now set for a volatile period after US trade tariffs on Chinese goods kicked in this morning as planned. The Australian dollar as a commodity currency is likely to be sensitive to any further escalations in these trade wars and the dollar could come under considerable pressure. $34 billion worth of tariffs have been imposed as of today and China has already reciprocated. US President Donald Trump has signalled his intent to increase these tariffs to as much as a staggering $450 billion on Chinese products if China retaliated.

It will now be interesting to see the response from the US after this retaliation and where this heads next. The EU has also been embroiled into these trade disputes highlighting how big an issue this all is. If global economic growth falls in the future then the Australian dollar is likely to be one of the hardest hit.

GBP AUD

Today marks a hugely important today for those clients looking to buy or sell Australian dollars with pounds. British Prime Minister Theresa’s May will be holding a cabinet meeting at Chequers to finalise the detail on Brexit and how close Britain will be aligned to the EU. There has been much disagreement within her cabinet and today should give guidance as to whether Britain will pursue a soft or a hard Brexit. The pound is likely to react accordingly and this meeting does have the potential to cause some fireworks.

No details have yet been released but the outcome of today’s meeting will form the basis for a white paper on Brexit. A softer Brexit that maintains trade and one that is likely to be agreed by the EU is likely to see the pound rally. However any resignations or objections from within government could create even more uncertainty for sterling exchange rates. Clients would be wise to plan around this event as we could finally be at the tipping point.

For more information on the Australian dollar and for assistance in making transfers at the opportune time then please get in touch with me James at jll@currencies.co.uk

Positive tone from the RBA leads to Australian Dollar strength overnight

The Australian Dollar has had a fairly solid 24 hours or so following on from the RBA (Reserve Bank of Australia) interest rate decision overnight.

No changes to interest rates were made and the interest rate level remained at 1.5% for the 23rd consecutive month, however it was the tone of the RBA that sparked the strength for the Australian Dollar against most majors.

The Australian Dollar has been one of the top performers of the trading day due to the outlook going forward. Currencies quite often move on speculation as well as fact, and many analysts had been expecting another fairly damp overview from the RBA meeting minutes.

What they actually received was a fairly positive report, citing that they now expect wage growth to improve and in fact that they felt that this had now troughed, and with reports of skills shortages in certain areas there is now an expectation from the RBA that wage growth will start to naturally rise and this should drag the economy up with it.

The Australian economy has had a mixed year so far, whilst there has been nothing to panic about the economic data that has been released has not exactly been fantastic, and throw into the mix the issues with Donald Trump with Trade Wars and the potential issue over North Korea earlier in the year and you can see just why the Australian Dollar has had a shaky 6 months.

Political tensions and larger global problems can also weaken the Australian Dollar as it is perceived as a ‘riskier’ currency, so global issues can decrease investors attitude to risk and therefore weaken the Australian Dollar when they occur.

There is little to come out in terms of Australian data in the coming days, but for those of you looking to carry out an exchange involving the Australian Dollar then non-farm payroll data in the U.S on Friday, which measure employment in America will be your next one to watch, as this can also impact global attitude to risk.

Should you need to carry out an exchange involving Australian Dollars and you would like to maximise your exchange then feel free to contact me (Daniel Wright) directly and I will be able to assit you with the timing of your transfer and ensuring that you get a great rate of exchange too. Feel free to email me on djw@currencies.co.uk and I will be more than happy to contact you personally to discuss the options available to you.

US Trade Wars to hurt the Aussie (Daniel Johnson)

How will the ongoing Trade Wars effect AUD?

Trump is  fighting trade wars on several fronts. He is unhappy with the trade deals currently in place with the EU, China and the US and is also renegotiating the North American Free Trade Agreement (NAFTA) involving Canada and Mexico.

The US has been imposing tariffs on all fronts, with the tariffs of choice being steel and aluminium. The tariffs placed on China could prove particularly detrimental to the Australian economy due to Australia’s heavy reliance on the Chinese purchasing it’s raw materials. The tariffs could hit Chinese growth which would cause a change in demand and price for Australia’s raw materials, particularly iron ore.

Global economic uncertainty is causing investors to move away from riskier commodity based currencies such as AUD in search of safe haven investments. Despite the US being at the centre of the ongoning trade wars. It is proving to be the destination of choice for investors. Interest rate levels are impressive and there is predicted to be several more hikes from the Fed this year. Ten year treasury bonds are also offering some of the highest returns in years.

Personally I feel China is in a trade war that cannot be won. If they intend to match US tariffs Dollar for Dollar they would need to impose tariffs on all US exports which is simply not feasible and would hit both economies hard. This would in turn have repercussions on the Aussie.

GBP/AUD -Sterling remains fragile due the lack of clarity on access to the customs union. There is due to be a proposal put forward from Theresa May to her cabinet at Chequers on Friday. If the proposal is accepted on the third attempt Brexit negotiations can move forward and the proposal can be presented to Brussels.

If the proposal is initially accepted on Friday you can expect Sterling strength. Personally if I was buying Australian Dollars short term I would be moving in the 1.79s. 1.80 is proving to be a resistance point.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Thank you for reading.