Daily Archives: July 5, 2017

RBA Hold Rates and Aussie Weakens (Ben Fletcher)

The Reserve Bank of Australia kept rates on hold this morning with the interest rate staying at 1.5%. This was followed by a fall in Aussie strength which took the GBP/AUD rate above 1.70. Whilst this level has been close int he last few weeks the actual market price hasn’t got above this point.

Upward Movement Potential

The Federal Reserve in the United States are going to reveal their latest meeting minutes which will provide an insight into how they plan to re balance the books.

Over the course of the lest 10 years since the financial crisis the FED have bought trillions of bonds to keep US banks afloat, these are now going to be progressively sold off. If the market likes the plan then the USD could start to strengthen. The AUD is considered a more volatile currency and its common place that when the USD starts to strengthen, it results in investors taking funds from riskier currencies such as the AUD.

Therefore in my opinion we may wake up tomorrow morning to the GBP/AUD rate moving into the 1.72/73 region. This would see a return to levels last seen in the first week of June. If you’re looking to purchase Aussie Dollars with Sterling for a short to medium term requirement the mid 1.70’s in my opinion would be a good time to buy. There does appear to be general positive trend with Sterling as we have moved away from the election, but whilst Brexit bubbles away anything could change at a instance. This is why I would encourage acting on spikes as they’re few and far between at the moment.

If you would like to discuss a trade you need to complete either immediately or in the next year please feel free to send me an email. I would be happy to discuss my forecast with you and explain how I may be able to help you achieve the best rates of exchange. Please send me an email to brf@currencies.co.uk with a brief message of what you’re looking to do.

RBA’s dovish stance weakens the Aussie (Daniel Johnson)

Monetary Policy Statement not the news Australia wanted to hear

Yesterday saw the Reserve Bank of Australia (RBA) interest rate decision followed by the monetary policy statement. Rates remained unchanged at 1.5% as widely expected. The monetary policy statement however did give an indication to monetary policy moving forward, there was expected to be a hawkish tone and traders sat with their fingers on the buttons ready to move. There was predicted to be an indication of a rate hike in the coming months, but this was put to bed as there was much more dovish tone as the monetary policy statement was delivered.

We saw Sterling rally against the Australian dollar but 1.70 seems to be a resistance point. I think we will need to see a significant catalyst for GBP/AUD to remain above 1.70.

In order for Sterling to make significant gains the UK needs to have a stable government in place. The DUPs influence on Brexit negotiations is not yet clear. There needs to be clarity on the UK’s stance in exit talks,  there may now need to be more compromise on the UK’s side. The “have your cake and eat it” strategy no longer seems viable. If the UK wishes to control immigration it could be detrimental to trade and in order for trade to remain buoyant there needs to be a more lax stance on immigration, which if put in place goes against the vote to leave in the first place. It is a sad state of affairs, I think brought about by politicians with their own agenda.

There are  several pending data releases which will influence GBP/AUD over the coming weeks. If you let me know the details of your requirement I will let you know which may be beneficial to your specific situation.

Trading during this period requires a great deal of skill in order to maximise your trade. You need a thorough understanding of the markets if you wish to time your trade correctly. If you would like my no obligation assistance, feel free to email me at dcj@currencies.co.uk.

I will provide a individual trading strategy to suit your needs. Thank you for reading.

Daniel Johnson