Monthly Archives: July 2017

Could the Pound fall further against the Australian Dollar? (Tom Holian)

The Pound has been really struggling to make gains vs the Australian Dollar over the last few weeks and since the election when GBPAUD exchange rates were close to 1.70 we have seen a huge drop in the value of Sterling exchange rates.

The Pound is finding it hard against all major currencies recently and the Pound has dropped by over 6% against the Australian Dollar in the last 2 months which is the difference of £6,000 on a transfer of £100,000 highlighting the importance of following the currency market or at least letting a currency broker do that for you.

Economic data in the UK has started to show signs of a slowdown as investor confidence in the UK economy as well as Sterling has started to fall.

UK GDP published on Wednesday showed a fall to 1.7% for the second quarter. This was in line with the expectation but the real problem is that the Brexit fears are slowly started to become realised.

The US and Chinese economy continue to post strong results which in turn in helping the strength of the Australian Dollar vs the Pound.

With the RBA unsure when to raise interest rates the meeting on Thursday by the Bank of England could be crucial as to the short term trend for GBPAUD exchange rates.

The likelihood is that we’ll see a change in the vote from last month which showed 5-3 in favour of a rate hike. If we see a fall in the appetite then I think this will send the Pound lower vs the Australian Dollar so keep a close eye out on the announcement later in the week.

 

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Political and Economic uncertainty weigh down the Pound (Daniel Johnson)

GBP/AUD – Will Sterling’s woes continue?

The pound has had a terrible time recently, GBP/AUD currently sitting at 1.6408. A small increase in GDP this week did little to bolster Sterling’s position. There are many reasons for Sterling’s weakness and I am struggling to find any reason for the pound to rally. The vote to exit the EU is having a huge impact on the UK economy. UK Inflation has been on a rising increase of late, reaching a high of 2.9%. If the rise continued there was potential the Bank of England would increase interest rates. Several members of the Monetary Policy Committee changed their stance and voted in favour of a rate hike. The rumours of a hike caused a short lived spike for the pound, however more recent inflation data saw a fall to 2.6%. With the chance of a rate hike now dashed, the pound fell in value against the Australian Dollar.

I believe a rate hike is not the solution to increase in inflation and the recent dip is a positive thing bringing us closer to average wage growth at 1.8% . There is a close correlation between average wage growth and inflation. Imported goods are more expensive due to the weak value Sterling the price increase is now being passed on to the consumer. Provided consumers still consider to spend this is fine, if they do not however the UK economy could be in serious trouble. Historically, political uncertainty weakens the currency in question and fifteen members of the conservative party have recently given a vote of no confidence regarding May’s position as PM. We need a stable government in place in order for the pound to rally against the Australian Dollar. Inflation has fallen on the other side of the pond and this is detrimental to the Aussie, but nothing that will weaken it considerably.

Brexit Talks a key factor on GBP/AUD buoyancy levels

Compromises will have to be made and the “have your cake and eat strategy” will have to be dropped.  Immigration laws need to allow the freedom of movement of people if there is to be access to free trade and this kind of defeats one of the main reasons  .This goes against one of the main reasons that voters chose to leave the EU  and would cause public uproar. Which is why I think compromises will be made, do not think these will happen quickly however it is likely to happen over time to soften the blow to those who voted to leave.

If you have a currency trade to perform I will be happpy to help. It is vital to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have confidence knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Australian Dollar remains strong, but Aussie Dollar sellers should be wary of the RBA’s attempts to weaken it! (Joseph Wright)

In the last month alone the Aussie Dollar has gained an impressive 4% against the US Dollar, and the currency has also manged to find itself trading at the top end of it’s post-Brexit levels against the Pound.

It has also become clear that the Reserve Bank of Australia is skeptical to make amendments to the current interest rate through fear of affecting the housing market. Property prices are overheating down under, especially in the east-coast and a change could create a dramatic impact so I believe there won’t be a change for a while.

The Pound has been underperforming recently which has accentuated the losses for the GBP to AUD rate, and although I think there’s a chance we could see the RBA attempt to talk down the Aussie Dollar and economy in order to keep the currency from becoming even more overvalued, I would rule out a move back down the lowest levels since the Brexit vote of 1.59.

If you are planning on exchanging Aussie Dollars into Pounds and think the rate could become even further favourable, it may be worth looking into setting up a Limit Order in order to try and trade at a higher rate should it become available. I’ll be happy to discuss this in further detail should you wish to.

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.

Will the GBPAUD rate rise or fall?`

The Australian dollar has been strengthening lately as investors predict that it will be sooner than later the RBA (Reserve Bank of Australia) has to raise interest rates. Where the RBA had previously been adopting a ore neutral stance which had see the Aussie weaker for part of 2017, the expectation is now for the to raise rates in the future. What this means is that the Australian dollar could strengthen even further and we could see rates to buy Aussies with pound getting more expensive. If you need to buy Australian dollars with pounds or even sell AUD for sterling understanding the market and your options in advance is key to maximising the position.

Expectations for the AUD to rise even further against the pound do seem likely but at the same time it would not be all too surprising to see the currency soften now. For Australia to raise interest rates they have to consider the negative impact on the Australian dollar since as a net exporter (they sell more overseas than they import) it is not good for the country to have an expensive currency. They want a weaker currency to encourage inwward investment and stimulate the economy.

Raising interest rates could easily cause the currency to weaken since with their base rate currently sitting at 1.5% it represents a very good investment compared to other currencies to invest in. Therefore I believe if you have a transfer to consider whilst the rates are uncertain you should be looking to make sure you don’t take too much risk and suddenly find the rate has unexpectedly become more expensive.

If you have a transfer to make current levels to buy pounds with Australian dollars are much improved from the last few weeks but this might not last. And for Aussie buyers the outlook is still shaky and we could easily see rates sub 1.60 once again. For more information on the best way forward with your transaction please speak to me Jonathan Watson by emailing jmw@currencies.co.uk to get a fresh overview of the market and analysis of the best way forward.

Thank you for reading and I look forward to hearing from you.

Australian Dollar rallies from FED back-stepping (Joshua Privett)

Pound to Australian Dollar exchange are once more on the back-foot after a few days of welcome stability. Once more a third party in the GBP/AUD relationship, the USA has stirred the pot with some controversial events of their own, driving vast sums of capital onto the Australian Dollar’s shores.

The Federal Reserve Bank of America were the first major Central Bank to raise interest rates since the financial crisis, and this year, they have since raised rates twice more. Initially forecasts of four hikes were keeping the Dollar strong, but some revisions downwards of expected growth in the US, most notably recently from the IMF, and current political instability, is shedding doubt on either of the next two actually occurring this side of 2018.

Why does this impact AUD/GBP rates?

In this world of low interest rates, the discussion on when the next rises will be are key for investor activity, which in turn affects the supply and demand which governs the value of any particular currency.

The Australian Dollar currently enjoys a relatively high interest rate compared to other currencies, and had previously been losing some value, with expectations of interest rates rises in more stable currencies such as the US Dollar driving investor activity elsewhere.

Here the converse is now true, with lowered expectations of any further rises at all in the US, down to just 50%. Spooked currency investors and high street institutions chose Australian Dollars as an alternative options after 7pm GMT yesterday with the release of the FED’s latest interest rate decision and monetary policy statement.

With a few more global currency markets still expected to open to trade on the news, then it is likely that rates should be ahead of where they were this morning for Australian Dollar sellers by midday, creating further opportunities to sell at highs not seen for a few months.

I strongly recommend that anyone with an Australian Dollar based currency requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

You can contact me directly by calling 01494 787 478 and asking the reception team to speak to Joshua.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant sums of money on a prospective transfer.

What will happen to the Pound vs the Australian Dollar this week? (Tom Holian)

Over the last two months the Australian Dollar has strengthened against the Pound by as much as 7% or the difference of £10,000 on a currency transfer of AUD$200,000 making a big difference as to when to move to or from Australia.

However, overnight we have seen some small gains for the Pound vs the Australian Dollar when RBA governor Philip Lowe suggested that any interest rate hikes may be some time off.

This led to the Pound briefly hitting 1.65 vs the Australian Dollar providing some brief respite to anyone looking to send money to Australia.

Today’s UK GDP data came out exactly as expected for the second quarter so this did little to affect GBPAUD exchange rates so the next catalyst for movement could come overnight with the release of the latest interest rate decision for the US when the Federal Reserve meets to decide its latest monetary policy.

I still think if there are any gains for the Pound vs the Australian Dollar they will be limited as the Pound continues to struggle owing to the Brexit uncertainty and that is unlikely to go away in the near future.

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

Pound to Australian Dollar improves despite IMF downgrade, is this a sign that the Pound is oversold? (Joseph Wright)

I wrote last week about how some analysts as well as members of the Reserve Bank of Australia are becoming concerned that the Aussie Dollar is becoming overvalued and higher than it perhaps should be, and I believe we will continue to hear similar commentary in the upcoming months.

Earlier in the year the Pound to Aussie rate hit the mid 1.70’s whereas the pair are now trading closer to 1.50 than 1.60. Since the Brexit the lowest the pair have fallen to is to a mid-market level of 1.59 so i don’t think we can rule out another move to these low levels as we don’t require the GBP/AUD pair to do something they haven’t in recent history.

In the early hours of this morning the Pound started off on the back foot after the International Monetary Fund (IMF) downgraded both the UK and the US growth forecasts for the rest of this year.

Throughout the day though the Pound has climbed, not just against the Aussie but across the board as the Pound as gained against all major currency pairs today.

Despite this boost I think that we could see the Pound trade at lower levels, especially if the UK inflation rate continues to under-perform and the likelihood of a rate hike from the Bank of England continues to dwindle.

If you have a 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 predictions against sterling

Over the last two weeks the Australian dollar has been making inroads against the pound and GBPAUD exchange rates have plummeted 7 cents. To put this into monetary terms for any clients that are purchasing Australian dollars with pounds a 400,000 Australian dollar purchase will now cost just under an additional £10,000. However on the other hand for clients converting Australian dollars into pounds this is certainly something to smile about.

The latest minutes from the Reserve Bank of Australia gave no clear indication that the RBA will be  raising interest rates anytime soon however the minutes were seen as bullish as it is clear that the next move will be to follow the trend of other central banks and raise the base rate.

UK inflation data disappointed last week which has relieved some of the pressure the Bank of England were receiving. The Bank of England set an inflation goal of 2% and at present even with the drop, inflation sits at 2.6%. Many economists were predicting if inflation rose above 3% we would get clear direction from the Governor of the Bank of England and an interest rate hike early next year was likely. However with inflation now falling the chances of a rate hike have diminished.

Since the UK public decided to vote out of the EU, the pound has lost approximately 15% against all of the major currencies. Brexit negotiations I believe will continue to weigh down on the pound for the foreseeable future as I don’t believe a deal will be struck anytime soon in regards to the divorce settlement or the rights of EU citizens living in the UK.

Therefore for Australian dollar buyers purchasing currency on the back of a positive move would be my strategy as I do not foresee any substantial gains being made over the upcoming months. Australian dollar sellers may wish to take advantage of the 7 cent spike in their favour or should continue to monitor the market and try to covert in the 1.50s.

However Australian dollar sellers should be cautious as the National Bank of Australia believe the Australian dollar is overvalued which I actually agree with. At the moment currency investment continues to land on Australian shores due to the high interest rates.

The main data releases to look out for this week are UK GDP numbers Wednesday morning which are set to show a decline which could lead to further sterling weakness and the Federal Reserve interest rate decision Wednesday evening. It is unlikely the Fed will raise interest rates and I expect a neutral statement by Janet Yellen shortly after. This could lead to a further sell off of US dollars and the Australian dollar could benefit.

For people that are converting pounds and Australian dollars for the first time, it is essential that you get the very best exchange rates. If you have used a brokerage for many years or have been referred a brokerage I strongly recommend you compare rates to make sure you get the best price possible and therefore save money. This simple exercise takes two minutes and in the past I have saved clients hundreds and in some instances thousands of pounds.

My direct email is drl@currencies.co.uk Dayle Littlejohn. Alternatively call me Monday morning on 0044 1494 787 478 and ask the reception team to be put through to Dayle Littlejohn.

Could the Aussie make further gains vs the Pound? (Tom Holian)

The Australian Dollar has gone from strength to strength recently vs the Pound as the economic and political uncertainty caused by the Brexit continues to put the Pound under pressure.

Next week there are a number of data releases that could have a big impact on GBPAUD exchange rates. The biggest day of the week will come on Wednesday when the Reserve Bank of Australia publishes Australian inflation data.

Inflation is a key factor in a central bank’s decision when it comes to moving interest rates so this could be a big influence as to what direction the RBA moves in when it comes to moving interest rates in the future.

After inflation data the UK releases second quarter GDP data. This will cover the period of the general election as well as when the Brexit talks were officially started so I think this data will be lower than the expectation of 1.7% year on year which in my opinion could lead to the Pound falling against the Australian Dollar.

We end the day with arguably one of the biggest events of the month when the US Federal Reserve publish their latest interest rate decision. The US economy has been very strong recently and typically when the US performs well this encourages global investors to increase their attitude to risk.

The value of the Australian Dollar is often improved when the data is positive in the US so we could see a very positive day for the Australian Dollar vs the Pound during Wednesday so make sure you’re prepared if you want to take advantage of the movements for GBPAUD exchange rates.

I work for one of the UK’s longest established currency brokers and I’m able to offer you bank beating exchange rates so if you would like further information or a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Sterling’s Woes continue (Daniel Johnson)

A question of who is worse off.

Australia is not in the greatest state. The Reserve Bank of Australia (RBA) are reluctant to making any monetary policy moves due to the problems with housing prices. Australia’s heavy reliance on the Chinese purchasing their raw materials does not bode well for a stable economy. It is almost as though Australia are reliant on China’s very respectable growth continuing, the problem is China’s growth is slipping and their are rumors some of China’s data releases are falsified. Iron ore Australia’s largest export has fell significantly in price which has caused worry among investors.

Australia’s troubles pale in comparison however compared to the UK, although I have faith the UK’s problems will be short to medium term. Unfortunately due to politicians with their own agenda the UK economy is in tatters. Inflation is far too high, not keeping up with average wage growth and house hold debt is shocking. Bordering on pre financial crisis levels witnessed in 2008. Car purchases are through the roof with loan approvals given to those who are in no position to make the payments.

The uncertainty surrounding Brexit negotiations is the main reason Sterling is so weak. until their is transparency on Britain’s stance on exit the pound has little chance of recovery.

If you are buying the Aussie with Sterling you are between a rock and a hard place. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavor to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.