Daily Archives: July 27, 2017

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.