Pound to Australian Dollar uutlook after Varadkar & Johnson Talks cause Sterling strength

Positive Brexit talks lifts GBP/AUD

Following positive news in Brexit proceedings we have seen gains for Sterling against the Australian Dollar. Boris Johnson spoke with Leo Varadkar for over two hours yesterday and were reported to be detailed and constructive. Varadkar said that the talks were very positive and negotiations could resume.

This is good news ahead of the EU summit on 17th and 18th October. Boris must have an acceptable deal in place by the 19th October in order to avoid either an extension or a no deal scenario. We saw Sterling make advances against the majority of major currencies following the news although whether these advance are justified can be argued.

US China trade war continues to effect AUD

With such little time to find a solution to the Irish border the Pound could remain fragile. The Australian economy is still under threat due to the prolonged trade war between the US and China due to Australia’s heavy reliance on China purchasing it’s exports. Brexit seems to be outweighing these concerns at this point and is one of the key factors affecting GBP/AUD.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

Reserve Bank of Australia update: Interest rate cuts expected

The pound to Australian dollar exchange rate has rallied higher today with rates for the GPB vs AUD sitting above 1.8250. There is a growing expectation that the Reserve Bank of Australia (RBA) may look to cut interest rates further at the meeting tomorrow morning. Some of the major banks including Westpac are predicting an interest rate cut which could be putting further pressure on the Australian dollar. Westpac has predicted rates for AUD/USD could hit a 10 year low as a result of further interest rate cuts. The RBA cut rates consecutively in June and July to try and add some stimulus to the economy to try and halt a slowdown down under. Unemployment in Australia recent climbed higher to 5.3% up from 4.9% the month prior which is causing alarm amongst policy makers at the central bank.

In the UK, Brexit remains the single biggest driver for sterling exchange rates. Expect a highly volatile week with the Conservative party conference in full swing despite a number of cyber-attacks making communications out of the conference difficult. Today is the second day of the conference and a speech from Chancellor Sajid Javid will be made this afternoon. Prime Minister Boris Johnson will be making his speech on Wednesday.

However with parliament now sitting after the Supreme Court ruled the proroguing of parliament to be unlawful the outlook as to whether there will be a deal or not is looking very cloudy and leaves an unclear picture for GBP to AUD exchange rates. Much of the Brexit debate focuses on a bill that was approved in parliament that requires the Prime Minister to request an extension for Brexit, something Boris Johnson strongly opposes. There have been reports that parliament will seek to introduce further legislation against the government to try and stop Boris Johnson from not committing to do this and he refuses to rule out a no deal Brexit.

It is worth mentioning that Nigel Farage announced over the weekend that he would stand for a seat in Westminster at the next general election which only highlights how tense the Brexit situation currently is.

Those with pending requirements to either buy or sell Australian dollars would be wise to consider their options with just one month to go before the Brexit deadline of 31st October. For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Pound to Australian Dollar Outlook after Supreme Court Rules against British Government

Parliament set to return today

The pound to Australian dollar exchange rate remains supported with rates having touched 1.84 for the GBP vs AUD earlier today. Yesterday saw the Supreme Court in Britain rule against the government finding that it was unlawful to prorogue parliament for 5 weeks. Today will now see parliament return at 11:30 and more uncertainty will inevitably come out of this. There have been calls from opposition party leaders for the Prime Minister to resign.

It has been reported that the government may use the opportunity of asking an ‘urgent question’ to try and force a debate on having a general election. The opposition parties that wish to see Boris Johnson depart from office are unwilling to call a vote of confidence which would trigger a general election which leaves a continuing deadlock in parliament. Jeremy Corbyn the leader of the Labour party is not expected to call for a vote of confidence in the Prime Minister today. Expect high volatility for GBP to AUD exchange rates as the Brexit deadline of 31st October approaches. Those with pending requirements to either buy or sell Australian dollars would be wise to plan around all the latest developments coming out of Westminster.

Will the RBNZ cut interest rates in November?

The Reserve Bank of Australia have said that the Australian economy is at a “gentle turning point”. The RBA cut interest rates twice this year with two consecutive rate cuts in June and July putting the pressure on Australian dollar exchange rates. The speech from Governor Philip Lowe was perceived as more dovish than expected. Keeping all option open he said that the RBA would “take stock of the evidence” on whether to cut again or not but the tone was seen as softer than the previous rhetoric. The Reserve Bank of New Zealand is also expected to hold rates having shocked the markets wit ha 50 basis point rate cut this year. It is relevant for the Australian dollar as the RBA was quick to act after the RBNZ made its policy decision to cut rates. The RBNZ are tipped to cut rates again in November and there is an argument to say it may have some sway on the RBA’s decision making.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Pound to Australian Dollar Forecast: GBP to AUD exchange rate makes strong gains

Australian unemployment data disappoints the markets

The pound to Australian dollar exchange rate has made strong gains after Australian unemployment data released this morning disappointed the markets. The interbank rates for GBP vs AUD have rallied higher to 1.8375, at the time of writing. The unemployment level down under rose in August to 5.3% from 5.2% the previous month. The last Reserve Bank of Australia minutes hinted at a weaker jobs markets and the concern now in that the numbers may disappoint further going forward. The unemployment data coincide with recent weak Gross Domestic Product data for the second quarter which was recorded as the lowest in the last decade.

Bank of England expected to leave rates on hold

UK retail sales data is released this morning ahead of the Bank of England interest rate decision at 12pm. The Bank of England is not expected to make any changes to the headline interest rate today with Brexit so close by as well as the growing prospect of a general election. Rates are expected to stay on hold at 0.75% with so many external distractions. This is despite UK inflation data released yesterday which fell to its lowest level since 2016 and below the Bank of England target rate. It has also been reported that in the event of a no deal Brexit then interest rates may be cut further in the coming months.

How will the Supreme court ruling affect the GBP to AUD exchange rate?

Brexit meanwhile continues to dictate the travel for sterling exchange rates and today will see the third and final day at the Supreme Court. The courts are hearing whether it was unlawful for Boris Johnson to prorogue parliament. An outcome may come as soon as today although the top judges may want the time over the weekend to come to a unanimous decision. Expect volatility based on the outcome especially if the courts did rule against the government. Expect high volatility for the GBP AUD pair and those clients looking to buy or sell Australian dollars would be wise to plan around all the latest developments.

The EU have also given the UK until the end of September to produce written proposals which could see a shift on where Brexit is heading. To date the Prime Minister has reportedly progressed discussions on the controversial backstop by providing alternatives where checks could be done away from the border. However the EU are keen to see these proposals in writing, something the British side is reluctant to do at this stage.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Pound to Australian Dollar exchange rate breaks through 1.80 barrier

The pound to Australian dollar exchange rate has been supported with rates sitting just below 1.80 for the GBP to AUD pair. Brexit uncertainty has kept the pound at bay in recent weeks although some optimism that a deal will be reached is helping lift the pound slightly. What is interesting though is that despite some stronger economic data from the UK the pound is struggling to find any real momentum for a big jump higher. It highlights how the wider issue of Brexit is preventing the pound from gaining until clarity is offered on a deal. The risk of a no deal remains and with parliament now prorogued until October 14th it leaves an uncertain period ahead of that Brexit deadline of 31st October 2019. The markets will now pay particular attention to the next EU summit to be held 17th October. It remains to be seen whether a last minute concession will be offered at this time for an agreement to be reached between Britain and the EU. Those with pending requirements to either buy or sell Australian dollars would be wise to plan around these important dates. A hearing in the Supreme Court next week will also be held after arch Remainer Gina Miller lost a court case in the high court when it was concluded it was legal for Boris Johnson to prorogue parliament. Today the highest civil court in Scotland has overturned that ruling stating the suspension is unlawful. Expect more volatility and Brexit twists and turns depending on that outcome at the Supreme Court next week.

UK economic data is light for the UK so focus will turn to Australian inflation expectations released overnight. The Reserve Bank of Australia has cut interest rates twice over the summer which has helped see the dollar weaken. The ongoing trade was between the US and China continues to impact on the global economy to which the Australian dollar is adversely affected. For more information on the Australian dollar and how to plan around these important events then please contact me James at jll@currencies.co.uk and I will be happy to assist.

Is QE on the cards from the Reserve Bank of Australia? (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian economy has suffered of late with a drop in house prices, increased unemployment and a cut in interest rates to a record low of 1%. Australia is heavily reliant on China purchasing its goods and due to this the US/China trade war is having an impact on the Australian Dollar.

China is in the midst of its slowest economic expansion in thirty years and the Chinese Yuan continues to drop in value posting a fresh 11 year low on Monday. Dr Adam Triggs of the Australian National University’s Asian Bureau of Economic Research points to the Trade War as a huge contributor to the Australian economy’s recent stalling “We trade a lot more than most countries and we rely on foreign money for investment, so when you start to get international turbulence we feel that a lot more than others.”

The  concerns around the Chinese economy and its drop in demand for Australian goods and services has meant that the Pound has managed to regain a footing above 1.80 on interbank despite the Brexit chaos Boris Johnson has been inflicting since taking over as Prime Minister.

As Australians interest rates follow the global trend of cuts there has been much speculation over the Reserve Bank of Australia’s, (RBA) next step in efforts to stimulate economy. For some time Westpac has led calls for the Reserve Bank to consider a further cut to 0.5% while Deutsche Bank says it expects the cash rate to drop to just 0.25% by as early as the end of this year. However, Philip Lowe the governor of the RBA has ignited a debate over whether Quantitative Easing (QE) would be the next step for the RBA. QE is essentially pumping money into an economy in order to stimulate growth. It is a controversial monetary policy as historically results have been mixed, it is far from a proven method and can also put the country in question in huge levels of debt. In the face of an economic crisis when he commented “we are prepared to do unconventional things if the economy warranted it” when questioned in Parliament.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

 

Australian economy under pressure and Boris attempts to suspend parliament

The Pound to Australian Dollar exchange rate has been moving in a positive direction recently.

The Australian economy has been struggling as of late owing to a fall in house prices, rising unemployment levels and a cut in interest rates to their lowest level on record at 1%.

The ongoing US China trade war is causing problems for the Australian economy and this is causing an issue for the Australian Dollar.

The Australian economy is heavily reliant on what happens in China as as China is such a large importer of natural resources from down under this can negatively affect the value of the Australian Dollar.

China is growing at its slowest level in over thirty years and the Chinese Yuan is now at a 11 year low.

The ongoing issues surrounding the Chinese economy and its drop in demand for Australian goods has allowed the Pound to push above 1.80 vs the Australian Dollar recently.

There are also rumours that the Reserve Bank of Australia are under pressure to cut interest rates even further from their current levels.

Westpac is calling for an interest rate cut to 0.5% whilst Deutsche Bank has predicted that we may even see rates as low as 0.25% by the end of the year.

However, RBA governor Philip Lowe has suggested that they may even consider Quantitative Easing as a form of monetary easing.

Indeed, he spoke out recently claiming ‘we are prepared to do unconventional things if the economy warranted it.’

In the meantime things are up in the air politically with British Prime Minister Boris Johnson having moved to suspend parliament.

His aim is to remove the chances of MPs trying to legislate against a no deal Brexit. This has caused a lot of movement for GBPAUD exchange and I fully expect this to cause even further moves this week.

If you are in the process of buying or selling Australian Dollars and would like a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Could we see Monetary Stimulus from the RBA? (Daniel Johnson)

Pound to Australian Dollar Forecast

This year the Reserve Bank of Australia (RBA) has continued to cut interest rates leaving the base rate at a record low of 1%. The change in monetary policy has so far failed to stimulate growth in the Australian economy which has resulted in the RBA board looking at  alternative methods of stimulus to try and aid the struggling economy.

There is the potential that quantitative easing (QE). QE is essentially pumping money into an economy in order to stimulate growth, printing money causing huge levels of debt.  The minutes of the RBA’s July meeting revealed that these unconventional monetary policy measures were discussed.

Both the Pound and the Australian Dollar are under pressure at the moment, although for different reasons as the Australian Dollars are mostly due to economic uncertainty as opposed to the UK’s ongoing political issues.

Over the past year the GBP/AUD rate is almost flat although in recent months the Aussie Dollar has mostly benefited from Sterling weakness which has kept GBPAUD below 1.80 for almost 2-months now.

The time scale for a deal on Brexit does not make good reading. Parliament is not due to reconvene from recess until early September which will leave just under eight weeks for Boris Johnson to get a deal in place. This is something Theresa May couldn’t do in over two and a half years.

Boris has threatened to leave the EU with no deal in place and has said he is not willing to negotiate with Brussels unless they’re willing to drop the Irish back stop. This is something Brussels have stated on numerous occasions they are not willing to do. The situation has not been taken well by investors and sterling has fallen in value as a result.

There is also the possibility of a general election and it will be interesting to see how the market will react. If we look at the 2010 general election for example, we saw sterling lose value due to the political uncertainty, but if Corbyn were to call for an election the probability of a no deal decreases which could cause a rally for the Pound.

The higher probability of a no deal the weaker you  could expect the pound to become.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, there could be little reason to justify significant gains for the pound.

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 19yrs. 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

 

Pound to Austrlian dollar predictions: Major volatility expected for pound to Australian dollar exchange rates

Of late mixed outlooks for the Australian dollar has caused the pound to remain range bound against sterling, with GBPAUD fluctuating close to 1.80. The Reserve Bank of Australia recently cut interest rates and forecasters second guessed that another cut is on the horizon as the RBA would need to follow the trend of its nearest neighbour as the Reserve Bank of New Zealand cut rates by 0.5% as their last meeting. In addition the RBA has even hinted at more unconventional methods such as quantitative easing and history would tell us that this could have a detrimental impact on the value of the Australian dollar.

However in recent RBA minutes, the RBA have stated that house prices in Sydney and Melbourne have actually been on the rise in recent months which is positive news for Australia as the housing market is a key cog to Australian economy. Therefore further cuts in interest rates should help the housing market however the RBA will have to think again if house prices continue to rise.

In less than two weeks MPs in the UK will return to the House of Commons and all eyes will turn to the leader of the opposition. Jeremy Corbyn has stated that he will file a motion of confidence against Boris Johnson and it will be interesting to see if any Tory rebels will back Corbyn in a bid to stop a no deal Brexit. Forecasters are suggesting that a no deal Brexit will cause the pound to crash, therefore if Boris is ousted this could help the pound, however if Boris takes the UK out of the EU without a deal this should help clients that are selling Australian dollars to buy pounds.

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 housing market causes concern for the Australian Dollar vs the Pound

The Pound has made some gains vs the Australian Dollar over the last few days with another increase during today’s trading session.

The market has appeared to have focused less on Brexit and looked closer as to what is happening with the Australian economy.

Westpac has reported more and more clients recently getting in to trouble, which ultimately has led to many clients going in to mortgage arrears which has led to an increase in the number of bank repossessions.

According to reports Westpac has repossessed a total of 550 up from 482 mainly in Western Australia.

ANZ & the National Australia Bank have also reported an increase in mortgage arrears during the previous quarter.

Australian unemployment remains at manageable levels but the increase in repossessions could be a sign of further problems ahead for the Australian economy.

Could the Pound struggle with Johnson in Europe this week?

In the meantime UK Prime Minister Boris Johnson will be visiting German Chancellor Angela Merkel later this week.

This will be followed by a meeting with French President Emmanuel Macron on Thursday. This could cause further movement for Sterling exchange rates as both leaders are likely to stick to their current stance which is no movement on the current EU Withdrawal Bill.

This could cause movement for the Pound as it steers us once again towards the chances of a no deal Brexit and if this is the case this could see the Pound lose some of its gains vs the Australian Dollar later this week.

Therefore, if you’ve got an upcoming requirement to exchange Australian Dollars then make sure you pay close attention to what is happening politically in the UK this week.

Having worked in the foreign exchange industry since 2003 I am confident that I can save you money on exchange rates when converting Australian Dollars . If you need to buy or sell Australian Dollars then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk