Australian Dollar highest against the Pound since January 2019

Last night the Reserve Bank of Australia published their latest set of minutes. The focus was aimed at the labour market as well as monitoring economic growth.

Earlier this month the RBA cut interest rates to just 1% which is now the lowest rate in history for Australia.

The general feeling is that the RBA will keep interest rates on hold but are ready to cut further if necessary.

One problem that the central bank faces is that as interest rates are at record lows this leaves them little room to cut even further.

On Thursday of this week the latest set of Australian unemployment data is due to be released.

Depending on the announcement, this could cause some movement for GBPAUD exchange rates so if you’re in the process of transferring Australian Dollars pay close attention to what impact this may have on exchange rates.

Over the weekend Chinese GDP data was published. The growth figures showed 6.2% which was similar to what was forecast.

The data was the lowest level since 1992 so although it is falling it is still extremely high compared to other Western economies.

GBPAUD exchange rates are now trading at their lowest level since January 2019 creating some excellent opportunities to sell Australian Dollars to buy Pounds.

Early next week the UK leadership election should be concluded.

The likely winner is Boris Johnson but whilst there is still some uncertainty as to who will become the next Prime Minister the Pound is facing some uncertainty.

Therefore, once we have a new leader in place could this provide the Pound with a small boost against a number of different currencies including vs the Australian Dollar?

I have worked for one of the UK’s leading currency brokers since 2003 and I’m confident that I can save you money on exchange rates compared to using your own bank so please contact me directly for a free quote.

Tom Holian teh@currencies.co.uk

 

 

Could a slowdown in China result in a weaker Australian Dollar?

Our regular readers will be aware of the connecting between the Australian and Chinese economies, and in particular the importance of a strong Chinese economy and how this can benefit Australia along with the Australian currency.

In the early hours of this morning Chinese GDP figures were released by the National Bureau of Statistics and the data shows that in the second quarter of this year China’s economy grew at its slowest pace since 1992, which is growth at a rate of 6.2%. This figure was expected so we haven’t seen a sell-off in the value of the currencies tied to the Chinese economy which the Australian Dollar arguably is, but it could be a warning sign moving forward.

The trade war between Australia and the US appears to have taken its toll on the Chinese economy, and the efforts of the Chinese Central Bank don’t appear to have has d the intending effect which is why the economies growth is shrinking. Through 2018 the growth figure for the year was 6.6%, and I think that those of our clients and readers that are hoping for a stronger Aussie Dollar should continue to monitor the Chinese economies performance.

Although there will be no data releases out of the UK today, there will be a number of key releases this week such as Earnings Data tomorrow morning and a speech from Bank of England governor Mark Carney tomorrow amongst other releases throughout the week. Do feel free to register your interest with me if you wish to be updated in the event of a major market movement between the GBP/AUD pair.

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.

Best time to sell Australian dollars for pounds since January : Will the Australian dollar rise further?

The Australian dollar has very recently hit the best time to be sold against sterling at 1.7868, since January 2019. This is a combination of factors including the strength of the Australian dollar, and also the weakness in the pound. A fine example of the strength on the Aussie was shown last week when the RBA (Reserve Bank of Australia) only cut their rate by 0.25%, with the market predicting 0.5% potentially and also signs of future cuts.

By refraining from committing to further cuts, the Aussie found some strength. Sterling is of course suffering under the pressure of Brexit uncertainties, as the market continues to attempt to digest what Brexit means and prepare for a no-deal.

On the Aussie, the market was also recently offered some good news with the G20 Summit not resulting in a severe deterioration of relations between the US and China. In fact, the two sides found some loose agreement and compromise and with the situation not destabilising majorly, the Aussie has again found some form. Investors are still preparing for future concerns on the trade wars and also the possibility of future cuts, but with these not manifesting immediately as troubles, the Aussie has risen.

The pound looks like it might well struggle ahead as both Conservative Party leadership and future UK Prime Minister candidates seek to embrace a no-deal Brexit. Sterling has suffered in the face of the uncertainty and we have seen the pound lower, it is not straightforward to see where future strength will emanate from, although some clarity over who will be the UK PM might help the pound.

Expectations are still mixed on the type of Brexit we will see, with Labour backing a second referendum more strongly, and many seeing the chance of a General Election increasing, there could be more volatility ahead.

Pound to Aussie dollar rates look due to remain below 1.80 but any sudden changes in sentiment could well see a quick reversal of the current trend, particularly with the higher level concerns on trade wars and interest rate cuts for the Aussie still remaining a longer term concern.

Thank you for reading and please let us know if there are any currency transfers that you wish to run through or discuss.

Thank you, Jonathan Watson

jmw@currencies.co.uk

 

Pound to Australian Dollar Forecast – GBP AUD rises over 1.80 after Weak Consumer Confidence

The pound to Australian dollar exchange rate has pushed slightly higher breaking over 1.80 again for the GBP to AUD pair. The National Australia Bank’s business survey yesterday disappointed the markets and has placed some pressure on the Australian dollar. However the Westpac consumer confidence numbers for July released overnight took a major fall into negative territory at -4.1%. The particularly low numbers signal a bumpy ride ahead with consumer confidence running low.

The weak numbers follow two consecutive interest rate cuts from the Reserve Bank of Australia although these cuts may take some time before any improvement in the economy is seen. The AUD to GBP pairing is likely to now be heavily influenced by any developments with the ongoing US China trade war and also the outcome from the next US Federal Reserve meeting later this month. The US Fed are widely tipped to cut interest rates at the July meeting and there are some expectations that there could even be a 50 basis point rate cut.

The Australian dollar as commodity currency will likely be impacted by any such move although the markets would appear to have started adjusting and pricing in prior to the event. In Australia, rates now sit at just 1%, the lowest on record and substantially lower than the average base rate which has been 4.39% since 1990. With rates so low the Australian dollar is currently disregarded as a high yielding currency and so there could be further weakness for the Aussie.

Brexit meanwhile continues to be the single biggest driver for sterling exchange rates and the GBP vs AUD pair. As the two Conservative runners battle it out for the top job the pound is likely to see a very volatile few months ahead. The new Prime Minister is expected to be announced 23rd July and the course of action he takes on Brexit will likely dictate the direction of travel for the pound vs Australian dollar. Any further rhetoric of a no deal Brexit is only likely to help see the pound weaken further. The fact that the favourite Boris Johnson has made so clear that Britain must leave the EU by 31st October with or without a deal is likely to be the main talking point for these coming months ahead of the deadline.

Tor assistance in making transfers either buying or selling Australian dollars and to talk through how these events will impact your own requirement then please get in touch with me James at jll@currencies.co.uk

Pound to Australian Dollar remains below 1.80 for now, but could AUD come under pressure and reverse the trend?

The Pound to Australian Dollar rate remains below the 1.80 level, although judging from the trend so far today it looks like we could see this level tested again soon as the Australian Dollar comes under pressure.

In the early hours of this morning it was confirmed as expected that Business Confidence within the country is declining and this has added pressure on the Australian Dollar. The currency has also been coming under pressure due to expectations of further interest rate cuts from the Reserve Bank of Australia later in the year, and now that the Central Bank of the US, The Federal Reserve Bank is expected to make less cuts than expected, we could see the the Aussie Dollar continue to soften. Previously AUD had been in high demand due to the high returns offered by banks down under but now that the base rate of interest has been cut to its record low of 1%, with further cuts expected AUD has lost some of its attractiveness especially against the US Dollar.

Sterling is likely to continue to be driven by the Conservative Leadership contest as anyone following UK politics will be aware. The Pound has been trading in a flat fashion recently and until the contest is over and we get an idea of the next steps for Brexit I expect this to continue.

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 set to improve further against the Pound?

The Reserve Bank of Australia cut interest rates this week to its lowest level in history at 1%. As it was widely expected the markets priced in the rate cut so the value of the Australian Dollar did not feel too much of an impact.

The RBA also hinted that it may be prepared to cut interest rates even further. Since June the RBA has cut rates by 0.5% and so I think the RBA may be tempted to adopt a wait and see approach before changing monetary policy once again.

With the markets expecting interest rates to be cut to 0.75% the GBPAUD exchange rate did not move too much as there was little reason to sell the Australian Dollar.

RBA governor Philip Lowe is due to be speaking on Tuesday and his speech should provide further clues as to when they may make further changes to policy.

Therefore, if you’re in the process of converting Australian Dollars then make sure you pay close attention to Lowe’s speech next week.

The Australian Dollar also improved during the course of this week owing to the latest trade surplus figures on Wednesday. The increase in the goods and services surplus came about owing to the increase in the export market in May.

The other good news came from the Australian housing market as building approvals increased. Although house prices have fallen in recent times down under, the increase in building approvals should be taken as a positive as it means there is an appetite for making money once again in the property market.

Whilst the UK continues to struggle with the uncertainty caused by Brexit and the leadership election I think we could see further improvements in the value of the Australian Dollar.

If you would like to save money on exchange rates when buying or selling Australian Dollars and Sterling then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

Australian dollar forecast: Will the Australian dollar weaken ahead?

The latest movements on the Australian dollar have seen the currency slightly stronger as investors buy into the Aussie following a more optimistic outlook on the Trade War concerns, plus the lack of any more immediate cuts from the RBA (Reserve Bank of Australia).  The RBA in their commentary have seen potential for more cuts ahead but have not directly signalled them, hence the Aussie rising.

Clients looking to any Australian dollar transfers might wish to consider the latest developments in these scenarios, as whilst to a degree the potential for the Aussie to weaken is present, the actual turn of events does not seem to be causing this. Allow me to elaborate! Generally, the cutting of interest rates will cause the currency concerned to weaken.

Therefore, with the RBA cutting interest rates, it might be perceived that the Australian dollar would weaken. However, with the RBA not looking to make any more immediate cuts, the currency has actually strengthened. The cutting of rates up ahead could be a factor that would weaken the Australian dollar in the future, clients looking to buy or sell Australian dollars up ahead might benefit from a quick review of their situation with one of our team.

The Trade Wars are another example of the uncertainty up ahead that whilst generally negative for the Australian currency, have also been more positive for the currency lately. The Australian dollar is trading at some of the best rates this year against the pound as the uncertainty of Brexit, plus the recent optimism for the Aussie dollar itself, all helps to lead to the rate dipping below 1.80, into the 1.79’s.

The Australian dollar has not completely shifted the potential for weakness, but with the potential for further cuts ahead, and also the trade wars still possibly an issue in the future. If you have a Australian dollar transfer for the future, and wish for some of the latest news concerning the rates and the market, please do get in touch.

 

Pound to Australian Dollar – RBA Cuts Rates

The pound to Australian dollar exchange rate has weakened despite an interest rate cut from the Reserve Bank of Australia last night. The RBA have cut interest rates from 1.25% down to 1% as concerns over a global slowdown and a downturn in Australia continue to influence the central bank’s decision making. The cut last night had been largely priced into the markets and there hasn’t been a major market reaction to the news.

The pound is nonetheless weaker against the Australian dollar although this is more likely to do with the truce between the US and China which will stop further trade tariffs being applied. There is a better opportunity to convert Australian dollars into pounds on the back of these recent developments. This may not last as there are reservations that the issue of the US China trade war will be resolved. The RBA may or may not wish to cut interest rates again and this topic is likely to generate much discussion. The US Federal Reserve are also expected to cut interest rates this month and this could have a far reaching impact on the Australian dollar. There has been talk of a US interest rate cut of 50 basis points which would be more extreme in approach than we have seen in recent years.

Brexit meanwhile continues to be the main driver for sterling exchange rates and the GBP to AUD pair is likely to see a volatile few months ahead of the latest deadline of 31st October 2019. The Conservative leadership battle continues between Jeremy Hunt and Boris Johnson both of who are pushing to deliver on Brexit. Boris Johnson however has been more forthright having stated that Britain will leave the EU by this date, come what may, do or die.

The prospect of a no deal outcome is now becoming a credible proposition and this has been reflected in the price of sterling across the board after Theresa May resigned as Prime Minister. Those with pending currency requirements either buying or selling Australian dollars would be wise to plan around these important events.

For morte information on the Australian dollar and for assistance in moving funds then please get in touch with me James at jll@currencies.co.uk

GBP to AUD rate expected to continue its decline this week

The Pound to Australian Dollar exchange rate has begun the week just north of the 1.80 benchmark level, which is around 3-cents lower than where the pair begun the week last week. There haven’t been many reasons for the Pound to climb in recent weeks and I think that until there is a new PM in place we could continue to see the political uncertainty continue to weigh on the Pound’s value which could push the GBP/AUD pair below the 1.80 level.

There will be a Reserve Bank of America meeting tomorrow and there are expectations of another interest rate cut, but as markets expect this amendment it’s already priced into the value of the Aussie Dollar. Despite this expected cut AUD is strengthening so I don’t expect to see the Aussie Dollar drop in value in it takes place, but I do expect to see the Aussie Dollar strengthen if the cut doesn’t take place.

Aside from this meeting the Aussie Dollar is being influenced at the moment but the US President’s trip to Asia, as not only has there been some positive developments between the US and China, which is a key trading partner for Australia, but we have also witnessed the first meeting on North Korean soil between a US President and North Korean leader and this has buoyed the markets. This kind of news is likely to further boost the Aussie Dollar, as it tends to gain in value in times of positive global updates due being a commodity currency.

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.

Pound to Australian Dollar Forecast – G20 summit and RBA Meeting

Could the US China Trade Wars be finishing soon?

We could be in for a very busy week for GBPAUD exchange rates owing to a number of different factors.

The G20 summit has now concluded and it appears as though talks between the US and China have been improving. Therefore, could this be a sign that the trade wars between the two world’s leading economies are coming to an end?

This should in theory help to strengthen the Australian Dollar against the Pound as the Australian Dollar is often driven by an increase in global risk appetite.

Trump has claimed that he had an excellent meeting with Chinese leader Xi Xingping. He also went on to say that ‘we are back on track’ when questioned about the situation between the two nations.

The Managing Director of the International Monetary Fund Christine Lagarde has also said of the situation ‘While the resumption of trade talks between the United States and China is welcome, tariffs already implemented are holding back the global economy, and unresolved issues carry a great deal of uncertainty about the future.’

Another interest rate cut coming in Australia next week?

Also, next week the Reserve Bank of Australia are due to meet again. Having recently cut interest rates to just 1.25% could we see another interest rate coming on Tuesday?

According to some reports there is a 74% chance of an interest rate cut next week so if this happens we could see losses for GBPAUD exchange rates early next week. There is a huge amount of concern as the housing market in Australia is under a lot of pressure.

Therefore, pay close attention to next week’s RBA decision if you have a currency transfer to make involving Australian Dollars.

I have worked for one of the UK’s leading currency brokers since 2003 and I’m confident of offering you bank beating exchange rates.

If you would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk