Daily Archives: July 20, 2017

Will GBPAUD rise or fall in the coming weeks?

The Australian is really benefiting from much improved certainty around the outlook on interest rates. Interest rates are a key factor in determining the relative strength and weakness of a currency and this is of vital importance for the Australian dollar. Viewed by investors as a good currency to hold because of the higher interest rates, the Australian dollar will rise in value if investors believe that interest rate will go up in the future. If you are buying Australian dollars the shorter term outlook is not great, it is likely the Aussie will make further gains. If you have a transfer to make buying or selling Australian dollars this information will be vital to the rate in the future.

The Reserve Bank of Australia confirmed that they could well be looking to raise interest rates in the future which has helped the Australian dollar to rise against the pound. The pound is actually much weaker too since Inflation has been falling in the UK at the latest release, this reduces the chance of an interest rate hike. Clients looking to buy or sell Australian dollars for pounds could see GBPAUD test closer to the 1.60 in the next few weeks but longer term it might well recover. Only two weeks ago we were headed to 1.70 so to be where we are now is a surprise in some respects. Events could quickly change again!

News that might help would be the US dollar strengthening again. The USDAUD rate is of real importance to GBPAUD since as USDAUD is the most heavily traded currency pair, the movements on US dollar to Aussie will ‘weigh’ on GBPAUD rates. So for example lately the US dollar has been weakening, this has helped the Aussie to rise which has affected GBPAUD too.

GBPAUD is on the slide but could quickly make a recovery! Every 1 or 2 cents on a big volume of currency can make a difference of thousands so if you have a transfer to consider and wish to get the best rates and help with the timing of any deal please speak to me Jonathan Watson by eamiling jmw@currencies.co.uk.

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

 

Pound to Australian Dollar exchange rates still testing lower levels (Joshua Privett)

Pound to Australian Dollar exchange rates have suffered recently, alongside the rest of the Pound’s pairings, and whilst currently sitting just above 1.64, has hit 1.62 just hours ago.

The underlying factors are there to justify the move. For one the Australian economy is enjoying an unrivalled period of sustained growth and the stability still seems there.

Just today it was reported that full-time jobs has surged to keep unemployment near four-year low, with 14,000 jobs added to the economy in June. The figures are actually stronger than they seem. Actually 62,000 full-time positions were added, whilst 48,000 temporary positions were lost (some of these becoming full-time positions and others being lost due to low tourist season).

What does this mean for rates moving forward?

With the fundamentals established for the AUD to at least maintain its value, the fortune for Australian Dollar buyers using Pounds lies in UK based developments.

We are now into the second round of the first phase of Brexit negotiations. Statements for the Eurozone state explicitly that sufficient progress has to be made here before we can address the key issue which markets are most interested in – trade.

These include the so called ‘divorce bill’, rights for citizens and the Irish border question.

The end of the first talks were formalities, this second round will be very telling at the pace talks are expected to proceed through. Productive conversations should yield greater confidence in Sterling, and the converse should lead to parallel drops.

Personally, based on how talks have progressed so far, I believe that sellers should be facing opportunities next week.

I strongly recommend that anyone with a 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 +44 1494 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.