Daily Archives: January 18, 2017

Theresa May Boost sterling’s Value! – Will This Trend Continue? (Matthew Vassallo)

GBP/AUD rates spiked during yesterday’s trading, with the pair gaining almost two cents.

The Pound hit 1.6422 at the high before retracting slightly today slightly today, with the AUD finding support moving it back towards 1.63.

Sterling’s value had soared, following UK Prime Minister Theresa may’s speech regarding the UK’s Brexit.

This was her most detailed speech to date regarding how the government hopes to facilitate our exit from the EU, with Article 50 still scheduled to be triggered in March to start the formal process.

The Pound benefited from positive comments regarding a future relationship with the remaining EU states and made significant gains against all the major currencies.

The markets have been left in limbo for months regarding how the UK economy intends to prosper following our exit, so yesterday’s more detailed plan will have come as a relief to investors who have been craving some solid information to work with. Personally, I don’t think the speech gave us a real insight into future policies but of course the noises being made were that the UK would create a stronger economy, which still had a relationship with our closest neighbours.

Theresa May did state that we would no longer be part of the single market but hoped for new custom arrangements with the remaining 27 EU states and that we would still contribute to the EU budget but wasn’t specific regarding how much.

The AUD has benefited from a run of positive economic data and the uncertainty surround the UK economy at present. However, due to the fact the AUD is a commodity based currency and as such relies heavily on its export trade, in particular the export of its raw materials to China, any global slowdown in this sector will hit their economy hard and the AUD would likely lose value as a result.

If you have an upcoming GBP or AUD currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Theresa May’s Brexit speech causes Sterling rally (Daniel Johnson)

May causes volatility on GBP/AUD

Theresa May spoke yesterday in took some of the uncertainty away from the markets buy outlining her intentions in regards to a UK exit from the EU.

She stated the UK can not remain in the single market as this would mean not leaving the EU at all. She did also announce that any agreement with the European Union would allow the freest possible trade in goods and services.” Investor confidence was returned and GBP/AUD currently sits in the 1.63.

EU leaders have stated the freedom of goods, services and workers is not realistic if there is restrictions on the free movement of people within the EU.

Personally, I think this is a very positive move for the UK, giving some clarity brexit. But it is important to realise it may not all be rosy from this point. I feel trade negotiation targets need to be extended from the current target of two years. Sir Ivan Rogers, UK ambassador to the EU recently resigned over the unrealistic time scale for exit and insufficient planning. Rogers thinks trade negotiations could take as long as ten years.

The US have been very forthcoming about getting a trade deal in place which should bring more confidence to investors, however it is important to look at the history of the US in previous trade negotiations. The quickest of which took four years.

US Interest Rate Levels could cause investors to leave the Australian Dollar

In December the Federal Reserve rose US interest rates and forward guidance has indicated there could be as many three more during 2017. Although forward guidance can be taken with a pinch of salt, this years guidance does bare more credence. Data from the US has been very positive and it seems Yellen will find it difficult to keeping rates on hold. It will be the popular destination for investors with higher return than previously and also a higher level of safety than the Australian Dollar. Employment figures have been dwindling down under and there has been large falls of employment in the mining sector. There are also rumours circulating Australia could lose its AAA credit rating which means the Aussie could be in for a rough year.

If you have a currency requirement I will be happy to assist. It is vital to be in touch with an experienced broker to try and maximise your return. I will be happy to provide a free strategy and also provide a rate comparison against your current provider should you have one. I can be contacted at dcj@currencies.co.uk. Thank you for reading.