Monthly Archives: September 2012

Chinese Growth Slowing causing GBPAUD exchange rate to increase

According to a report published by Goldman Sachs China’s economy is expected to slow down to about 7% over the next ten years but its stock market is still resilient to a slowing of growth. China has clearly demonstrated excellent growth figures over the last few years but more recently the quantity has been more than the quality which has put some companies off from trading with the country. China’s annual growth has measured an average of 10% over the last thirty years so an immediate slowdown is unlikely but I’m certain we’ll see a slowing over the next few months as Europe and the US are struggling to grow themselves. With the Australian Dollar exchange rate having improved  over since the global credit crunch of 2008 by almost 40% against Sterling as it distanced itself from global debt the country has seen a huge influx of funds from China owing to the successful mining region and Australia’s reluctance to involve itself in international fiscal problems. The slowdown in China is the seventh consecutive quart of slowing growth and I would expect this to continue but compared to Europe and the UK which are rooted in recession I think it’ll remain strong in comparison for quite some time.

The effect of a slowing Chinese economy could mean less risk appetite for the Australian Dollar but with if the RBA does not cut interest rates at this week’s meeting we could see a strengthening of the AUD against USD, Euro and GBP so if you have a currency requirement and are not sure about how to save money when transferring currency please do not hesitate to contact me directly Tom Holian teh@currencies.co.uk for more information

KEY DATA WATCH

The Reserve Bank of Australia meets on Tuesday and my personal thoughts are that we’ll see a rate cut providing a good short term opportunity to buy Australian Dollars. See the following link for useful insight http://www.heraldsun.com.au/business/terry-mccranns-column/reserve-bank-of-australia-best-placed-to-move-to-new-world/story-e6frfig6-1226484530830 or ask me a question Tom Holian teh@currencies.co.uk  

Australian Dollar Strengthens against Sterling following Spanish austerity measures

The Australian Dollar strengthened overnight after Spain announced austerity measures in their 2013 budget. In the short term this has diverted the attention of the RBA and its potential interest rate cut next week. Accoridng to some polls including a Dow Jones survey of 15 economists only 4 thought their would be a rate cut but for the majority they were sitting on the fence. I’ll personally be a bit more bold and suggest that the RBA will cut interest rates as I think it could provide the stimulus needed to boost the economy outside of the mining region. Some economists think it could be November but I think there is a strong possibility that rates will be cut providing those needing to buy Australian Dollars with a good opportunity is that’s the case.

With the recent profit taking the market is staying in quite a tight range in anticipation of what may or may not happen next week. Later today the Spanish banking stress tests are due out so if they’re better than expected then we could see a short term strengthening of the AUD as investors increase risk appetite.

China also helped to keep the AUD strong as they pumped in 365bn Yaun into the money markets to boost their economy Demand from China for iron ore and coal and other commodities has driven the Australian economy in recent times and if further stimulus carries on in China this could keep the AUD strong.

For information about how to save money when making currency transfer please do not hesitate to contact me Tom Holian teh@currencies.co.uk 

Which way for the Australian Dollar now? AUD forecast

As my colleague Tom alluded to below, many analysts expect the Reserve Bank of Australia to cut interest rates at its next meeting scheduled in the first week of October. This may be good news for anyone buying dollars as I  personally feel this will hold back any short term gains for the Aussie and I would expect GBP/AUD to head towards 1.60 and AUD/EUR towards 1.25. I am more confident that any losses against the Euro will be short term as I am still less than convinced, even with recent positive tones coming from Europe, that  a resolution will be found to the euro zone debt problems. Yes the bond buying program to be introduced will give a much need influx to the European countries that most need it (ie Spain, Italy, Greece et al) however how long til the mud sticks? To me it is not sustainable and the ECB cannot continue to simply throw more money at the problem and I am sure at some point the problems will resurface and the Euro exchange rates affected as a result. As for GBP/AUD, I personally see a the market range bound between 1.56-1.58 and  a long term see resistance at the 1.60 territory, however should you be buying the Aussie in the coming weeks rates, as they are, still represents a decent return in my opinion. Since the beginning of August the pound has gained some 6% – surely not to be sniffed at and a good return in anyone’s eyes.

To take advantage of the current spike against the AUD or to discuss your transfer in more detail then please do not hesitate to contact Mike direct on mgv@currencies.co.uk or call 01494 787478. As a specialist currency broker there are a number of different contracts individuals and corporate clients alike can utilise to gain the most from their currency trade. As part of the service I can happily run through the best contract for you and pass on my independent view on the market to help you make an informed decision as when is best to execute your trade. Contact Mike on mgv@currencies.co.uk

Australian Dollar Recent Trends

The recent turned for buying the Australian Dollar has certainly been very much in Sterling favour. GBPAUD exchange rates have hit 3 month high earlier this month showing gains of almost 6% since the lows during the last three months. The Aussie Dollar is heavily influenced by commodity prices which have seen a fall recently particularly in iron ore and as a major exporter of raw materials this has seen a drop in its value. A fall in output and demand in China has also led to problems facing the Australian economy and future growth forecasts. The New Zealand Dollar which tends to loosely track the GBPAUD exchange rate has also seen a drop in value as has the South African Rand.

There is a chance that the Reserve Bank of Australia may cut interest rates at its meeting next week in a possible attempt to devalue the AUD which is extremely strong and has outperformed most currencies this year. However, if rates are not cut we could see a further strengthening of the AUD so if you have a currency transfer to make it may be worth contacting me to discuss the various options Tom Holian teh@currencies.co.uk 

European stock indices have all fallen today following the strikes and riots in Greece which has added to the instability in the region creating a number of good buying opportunities for those needing to buy Australian Dollars and a Bank of Spain report showed that the Spanish economy had continued to shrink at a significant rate in the third quarter of the year.

If you need to convert Australian Dollars and would like to take advantage of commercial exchange rates even for private individuals please feel free to contact me Tom Holian teh@currencies.co.uk 

GBP continues its gains against the Aussie Dollar. Best AUD rates as now represents a good buying opportunity

The Australian Dollar over the last month has weakened by 1.5% on a trade weight basis. This figure is taken by how the Aussie Dollar has performed against 16 of the worlds most traded currencies. Going forward there are numerous factors that will affect the currency strengthening or weakening over the coming weeks.

Three of the biggest factors must be how the Chinese economy performs, If the Euro crisis gets resolved and in Australia how the Reserve Bank of Australia (RBA) views future growth within the Australian economy and if they will look at cutting interest rates.

Overnight the Australian Dollar is slightly higher, against most of its counterparties. Early hours this morning the RBA released its twice-yearly Financial Stability Report, which gave a mostly positive reading of the domestic banking sector and consumer spending habits which is what has slightly boosted the currency along with news that China’s economy slightly rose in August.

Now looking forward as the debacle in Europe continues to look unstable I think the Aussie will linger around these levels potentially even weaken by another 1-2% There is around an 85% chance that the RBA will look at cutting rates in October. If this does occur then we may just well see GBP/AUD rates head towards that 1.60 level but more realistically is that we will see no movement and the Aussie may just strengthen by a cent or so.

Considering that just a few weeks ago the GBP/AUD rate was hovering around the 1.47 level I feel that the current rates represent a great buying opportunity.

The next two weeks will be very interesting with a lot of data to come out of Europe and China. If you are selling AUD now may be wise because if there is a rate cut down under the rate may just spiral. If you are buying Aussie Dollars levels are at their best levels for weeks but a limit order with us may be ideal as we will try and help you achieve a slightly better rate than what is currently available.

We assist thousands of clients here in the UK and in Australia with their currency conversions. We will not be beaten by any banks quotes and for private individuals we offer you the same options as we would a corporate clients which most banks just will not do.

If you have a requirement to buy or sell the AUD against any major currency then please do feel free to contact me at bma@currencies.co.uk and I will talk you through all the options that are available to you.

Will the Australian Dollar continue to Weaken?

In the last two weeks we have seen a slow pattern emerging of the Australian Dollar weakening against Sterling.  The recent data that has been coming out of China is showing a slowdown and this can be highlighted when looking at the luxury brand Burberry. The company has seen a 20% drop in its share price as confidence in China seems to be waning. Certainly this could be seen as only a small signal but to me it could be the start of luxury brands beginning to suffer with a Chinese slowdown. If this is the sign of things to come we could see a weakening of the Australian Dollar going forward. The Aussie appears extremely overvalued and its reliance on Chinese growth has seen the Aussie GBP rate hit recent highs in the last twelve months. Surely the Australian economy will suffer if the exchange rate continues to stay where it is so long term it could be argued that we cannot see GBPAUD exchange rates continue at these levels.

With the EU struggling to reach a budget agreement and with proposals for the overall budget for 1,033bn some countries are arguing that this is too much. The European Commission meets every six years to discuss these targets and this represents 1% of European income so it doesn’t seem like much to ask but having said that money seems hard to come by in Europe at the moment so every spare cent needs to be accounted for. Indeed, with this instability again affecting the Euro the lack of confidence means less risk appetite for the Australian Dollar and therefore a rise for GBPAUD exchange rates.

With slowing gloabl grwoth and falling commodity prices in Australia this means that the government’s tax base is being weakened and they may need to look for alternatives to increase savings. The Reserve Bank of Australia next meets on October 2nd to decide what to do with interest rates.  Personally, I would be surpirsed if there is any change but do keep in contact with me during the week to find out if the forecast changes.

If you have any queries or questions about how to save money when transferring Australian Dollars then feel free to contact me directly Tom Holian teh@currencies.co.uk and I look forward to hearing from you.

Australian Dollar continues to weaken following Bank of Japan announcement

We have seen the Australian Dollar continue to weaken this week partly following the announcement made by the Bank of Japan. After the announcement we saw a sell off of Yen but since the news the markets have corrected again and funds have flooded back to Japan and away from the AUD. The AUD has dropped by over 1% against the YEN and the same over the last two days against Sterling. The continued arguments over the island dispute between Japan and China could also harm Chinese prospects and therefore also create some negativity for the Australian Dollar.

Also, news surrounding Europe and the instability surrounding the single currency continues to affect how the AUD may perform over the next few days. I would anticipate GBP being the primary benefactor of any bad news down under and resistance levels are looking at GBPAUD 1.5660 so if you’re thinking about making a currency transfer and want to save money on your exchange rates feel free to contact me directly Tom Holian teh@currencies.co.uk

As an experienced writer on various websites please feel free to take a look at www.poundsterlingforecast.com and www.eurorateforecast.com for further information. Alternatively click on the attached link http://uk.finance.yahoo.com/news/spain-places-10-bonds-lower-091437846.html which will provide you with the detailed analysis of the bond issues in Spain. If the Spanish problem persists which I think it may well do we could see more uncertainty which in turn could see more weakening of the Australian Dollar. Feel free to also read the attached article which shows how poorly businesses in Europe are doing http://uk.finance.yahoo.com/news/spain-places-10-bonds-lower-091437846.html

www.currencies.co.uk – Change money with Foreign Currency

Sterling posting good gains against the AUD, will this last?

Sterling exchange rates have rallied at the start of the trading week peaking just shy of 1.56 yesterday – bringing gains close to 3 cents since the start of the week. Movements appears to be as a result of AUD weakness as opposed to GBP strength following news that the central bank in Australia will consider further monetary easing in the months to come. This could well lead to continuation of the current trend and a move towards 1.60, although those buying AUD in the short term watch out for the Bank of England minutes this morning at 09:30. These minutes will give insight as to what the Monetary Policy Committee has in store with regards to monetary stimulus. The main aspect to look for is whether more QE was discussed – if this was then I would expect to see a fall in the value of GBP. Personally I think QE is on their minds but possibly not before Christmas and as a result I think the minutes are unlikely to cause too much negativity and I would expect to see GBP/AUD push towards 1.56 and beyond.

Should you have a need to buy or sell AUD, whether it be to GBP, EUR or any major currency and you would like to discuss the current market trends and forecasts then please do feel free to contact me. I personally feel the AUD will continue to fall against a host of currencies due to a number of factors (potential monetary easing as discussed above), a fall in commodity prices, and also the falling out put form Australia’s main importer – China. Factors here suggest a period of sustained dollar weakness, gpotentially good news for some as the dollar has been strong for so long.

As a specialist currency broker we have access to a number of different tools to help maximise and time your exchange. To discuss the service we provide in more detail and to run through your individual trade then please contact Mike directly on mgv@currencies.co.uk or call 01494 787478.

Australian banks confirm worries, GBPAUD to climb?

On Monday data released from the Minerals Council of Australia (MCA) revealed that the cost position was falling, i.e. labour costs are growing to one of the highest globally. As regular readers will be aware along with people watching the AUD, their economy is closely linked with the price of raw materials and their mining section as it’s the largest part of their economy. Australia is the resource capital for the fast growing China and far east.  So as this data confirms growing concerns that this sector is under pressure, their economy is expected to slow, the AUD seems less attractive to investors, this lack in demand makes it cheaper for buys.

Following these figures the Australian resource minister stated that the commodity boom is ending – even though this is bad news for the future of the Australian economy it’s not suggesting it will come to a complete stop. I would expect them to continue to export at huge volumes just less than recent times.  We are currently trading near 4 month high buying AUD

So what does this mean for the future of for AUD buyers and AUD sellers?

Well the facts still remain that China is still growing at a HUGE rate compared to the rest of the modern world, well over 7% compared to
near ZERO in the UK. So demand will remain and the future of the AUD is still strong. In the medium term for buyers the hints may have come this week already from the Royal Bank of Australia (RBA), their central bank.  In their most recent minutes they indicated scope for monetary easing. This generally weakens a currency as it creates more money making the amount available all worth slightly less. Now we don’t know exactly what option they will follow, whether it be using the UK method, the US method or the Europeans and this will be key to the future medium term strength of the AUD. For more information about this and long term forecasts feel free to contact us on the normal number or me directly at hse@currencies.co.uk

For short term buyers i.e. over the next fortnight keep an eye out for a few key data released due. These could easily change rates by over 2 cents making a difference of $2,000 for every £100,000 exchanged.

If you need to complete an exchange or would like to make sure you are getting the best price, contact us today. Even to compare your current provider. Either call me on the normal number or email me at hse@currencies.co.uk

Thank you,

Steve Eakins

US Fed release more QE

Yesterday the Federal Reserve in America surprised markets with news of a fresh round of Quantitative easing. Most of the markets were expecting some but it is safe to say that it was unprecedented. In fact quite worrying in some ways. They stated they would do a further $40 Billion every MONTH until the unemployment figures starts to fall in the US. The number of people out of work in the US has been stuck between 8.1%-8.3% for over 6 months. They even suggest it would not be until 2014 until it goes under 7%, very poor really. So this additional support could easily continue for over 12 months, adding trillions in the amount of debt the US holds. All this and we really only expect to see an improvement in 3-4 months minus.

So what are the effects?

All this additional investment has been seen as a huge push for risk takers that are happy to do more. So investors pull their funds from the safe haven of the dollar and invest in other currencies like the Australian Dollar. So more people selling the USD makes buying the dollar cheaper, all  the additional demand for the Australian Dollar makes it more expensive to buy.  Buyers of the AUD have lost over $2,000 for every £100,000 traded since the beginning of the week. 

So what shall I do if I need to buy?

If you are a USD buyer, buy now would be my thoughts. If a seller of the USD hold off if you can.

If you are buying AUD, hold on maybe but be aware that it will get worse before it improves I would think. Sellers, well jump on, trade
now at these near 4 month highs for you! I personally would not be surprised to see AUD continue to strengthen due to this demand by another 2 cents in the next fortnight, costing buyers $2,000 for every £100,000 traded.

If you are looking at trading or want more information, contact us today. We are a pro-active service helping you save money. Simply put if we could not help, we would not be in business. Contact me directly today by email at hse@currencies.co.uk or call the normal number asking for me Steve Eakins.

Thank you,

Steve Eakins