Daily Archives: June 29, 2017

Sterling Fights Back Following Carney’s UK Rate Hike Comments (Matthew Vassallo)

The Pound finally made some inroads against the AUD over the past 48 hours, with GBP/AUD hitting 1.6950 at today’s high.

The Pound has gained almost two cents, with those clients holding Sterling have BoE governor Mark Carney to thank for the recent improvement.

Carney surprised the markets by suggesting a rise in UK interest rates was not being discounted, despite comments he made last week which seemed to dampen expectation of a hike.

He even went as far as to suggest that it would be necessary, should UK business’s shrug off Brexit uncertainty and raise investment and wages. He stopped as far as giving a time-frame on any prospective rate hike and whilst his comments may be diluted over the coming days, the initial impact was certainly a positive one for the Pound.

Today’s move brought some much-needed respite to those clients holding Sterling, after watching its value decrease over recent weeks. A combination of the disastrous election results as far as market perception was concerned and the on-going uncertainty surrounding Brexit negotiations, has dragged the Pound’s value down investor’s risk appetite shrunk alongside the UK’s economic growth forecasts.

Despite today’s improvements, I would be wary about assuming the current trend is here to stay.  With a wave of support growing for the Corbyn led Labour party and infighting amongst the Tories, further political unrest in likely and this in turn is likely to heap pressure on the UK economy and ultimately the Pound over the coming weeks.

UK Brexit negotiator David Davis remains unsurprisingly bullish but confirmed that a strong majority would have given him a better starting, as to which to enter into negotiations with the EU.

For those clients holding the AUD, I feel is likely to find some protection under 1.70 but with the current market unpredictability, any exposed positions could be hit hard by a change in market sentiment.

Being a commodity based currency the AUD relies heavily on global growth remaining strong and whilst the current climate is pushing investors towards the AUD and its higher yielding interest rates, any slowdown in its export sector will hit the Australian economy hard and the AUD will almost certainly suffer as a result.

A strong AUD relies heavily on the export of Australia’s vast supply of raw materials to China, so any clients looking to buy or sell AUD should have a strong interest in Australia’s monthly trade balance figures.

Whilst so much instability remains, those clients holding both currencies need to ask themselves whether they are prepared to risk further losses, in order to make any gains.

Personally, I feel that the pound will be restricted in terms of how far it can go and in my opinion, based on the current market uncertainty, the downside risks currently outweigh the upside gains.

For this reason, I would be looking to protect the current levels, rather than a gamble on any substantial up gain

If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

Next week to be a busy one for Australian Dollar exchange rates (Daniel Wright)

Next week we have a flurry of economic data which will have an impact on Australian Dollar exchange rates after a fairly quiet end to the trading month.

On Tuesday we have the RBA (Reserve Bank of Australia) interest rate decision, shortly followed by the interest rate statement. At the last interest rate decision we saw no changes to rates and on top of this we also had comments that the RBA would more than likely not be looking to cut interest rates in the near future. The reason for this is to avoid adding to the current asset bubble they are witnessing and I would be surprised if that stance has changed.

It will be interesting  to see if the general view going forward has altered at all and should there be any hint towards the RBA leaning towards a cut in interest rates then we may see the Australian Dollar weaken a little.

Later on in the week we have the release of Australian import and export data early on Thursday morning, and this will also have an impact on the value of the Australian Dollar due to exports being so key for the Australian economy.

We had a report released earlier this week suggesting that there actually is a rather high debt burden in Australia at present, with household debt rising extremely rapidly which may be a concern for Australia later down the line.

My personal opinion is that I can see a small period of Australian Dollar weakness coming up as there does appear to be a few different matters out there that may lead to the Australian Dollar getting a little weaker.

If you are in the position where you may need to buy or sell Australian Dollars in the coming days, weeks or months then it is extremely important that you have an experienced currency broker on your side. You are more than welcome to get in touch with me (Daniel Wright) personally and I will be able to help you, both in terms of securing the very best exchange rate and timing your transaction. This can make the difference of thousands of Dollars.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will be more than happy to speak with you personally to explain exactly how I can be of assistance.