Monthly Archives: September 2017

Will the Pound continue to rise against the Australian Dollar? (Tom Holian)

We have seen the Pound consistently challenge levels of 1.70-1.71 in the last fortnight with the Pound clearly finding support vs the Australian Dollar.

The UK economic data announced during September was generally speaking very positive and this has been reflected in GBPAUD exchange rates.

UK inflation has hit a 5 year high recently and this has caused the Bank of England to consider raising interest rates sooner than the market previously had expected.

Typically if inflation rises then a central bank will hike rates in order to control the problem.

However, with UK average earnings falling behind inflation then in my opinion I think an interest rate hike could cause a problem for economic growth in the future.

The Reserve Bank of Australia are due to meet on Tuesday to announce their latest interest rate decision and at the moment I think the RBA will keep rates on hold but each meeting for the last few months has caused a lot of movement for GBPAUD exchange rates.

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.

RBA and BOA in very different positions in regards to Interest Rate Strategy (Daniel Johnson)

BOE indicate possible Interest rate hike

Mark Carney, the governor of the Bank of England has recently stated there is the strong possibility of an interest rate hike in the coming months. The justification behind this move however is dubious. Inflation is at 2.9%.

Inflation is only healthy for an economy provided average wage growth is moving at a similar pace. This is not the case, latest figures showed a decline to 2.1%. If goods and services are more expensive and consumers are making less money there could well be reluctance to spend. This is when there could be the potential for recession. So why encourage consumers to save by raising rates when you should be encouraging consumers to spend?

Unemployment has also been cited as justification for a rate hike. These are being lauded as the best figures since the 70’s, but this release is misleading as zero hour contracts have recently been introduced and will make up a significant chunk of this data.

The MPC who vote on interest rates voted 7-2 in favor of keeping rates on hold this month. Is such a big swing possible by November?

Still, investors are biting with GBP/AUD consistently breaking 1.70 and Carney is doubtful to change his stance during today’s speech.

RBA concerned about Australian Dollar strength

The Reserve Bank of Australia (RBA) entirely different predicament, whereby the strength of the Aussie is cause for concern. The primary export for Australia is iron ore, Australia is heavily reliant on the Chinese purchasing this raw material. The strength of the Aussie and dwindling growth from China is a real threat to long term economic health. Philip Lowe the head of the RBA has attempted to talk down the value of the currency but has not had the same success as Carney. If you are buying AUD, I am of the opinion maximising your return will depend on your times scale.

If you have a currency requirement I will be happy to assist. 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 endeavour 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.

 

Pound makes gains vs the Australian Dollar on interest rate hike rumours (Tom Holian)

The Pound has made some solid gains during the last fortnight vs the Australian Dollar creating some better opportunities to buy Australian Dollars with Pounds.

The Pound has gained owing to the suggestion that the Bank of England are making plans for a potential interest rate hike in November. It is not just against the Australian Dollar but also against a whole host of other major currencies in Sterling’s favour.

We have broken through 1.70 on the Interbank level on a number of occasions and it appears as though there is a level of support just underneath this trading level.

The next potential catalyst for GBPAUD exchange rate movement is likely to come on Tuesday when the Reserve Bank of Australia meets to announce their latest monetary policy.

I don’t think we’ll see any movement in interest rates next week in Australia but with the US likely to raise rates before the end of the year as well as the UK potentially doing something in a few weeks there is a chance that we’ll see an interest rate hike in Australia next year.

In the meantime I expect to see the Pound continue to challenge the current 1.71 range and possibly break through as we go into next month.

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.

Is the Aussie Dollars bullish run coming to an end? (Joseph Wright)

The Pound is continuing its recovery against the Aussie Dollar, with the rate rising above the 1.70 mark once again and this time almost hitting 1.72 at its highest point during today’s trading session.

I believe this change in direction for the pair can be put down to both Sterling strength as the pound is also putting in some strong performance against other major currency pairs. This is likely due to Brexit headlines and uncertainties not being in the spotlight which has been a welcome change for those hoping to exchange their Pounds at more competitive levels.

The upward movement for GBP/AUD has also been aided by the weakening Aussie Dollar which had previously been one of the strongest performers of the year.

The drop in the Aussie dollars value can be put down to a slowdown in Chinese growth, falling commodity prices such a iron ore which is key for AUD, and also talk of the Reserve Bank of Australia not planning on hiking interest rates until 2019 which is in start contrast to the Bank of England who have alluded to hike as soon as next month.

Tomorrow morning there will be a key data release out of the UK as UK GDP will be released around 9.30am. If this figure deviates from the expectation we could see further movement, so feel free to get in touch with me if you wish to be kept updated regarding this release.

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.

How will Australian interest rates impact the Aussie dollar?

Countries around the globe this year have been raising interest rates due to the global outlook improving. The Reserve Bank of Australia are one of the countries that have kept interest rates at record lows and many economists have predicted that a hike could occur sooner rather than later.

However Australian lender Westpac announced this week this think it is unlikely that interest rates will be raised until 2020 which could have major implication for Australian dollar exchange rates, if their predictions come true. Westpac’s theory is that it is unlikely that wages pressure will rise and consequently inflation will remain at current levels.

With most leading nations raising interest rates the Australian economy would be left behind and investment would continue to leave the Australian dollar which means buying currency would become more expensive.

However ANZ have a slightly different view and believe household debt is high, referring to the housing bubble in the major cities therefore they believe the Reserve Bank of Australia are likely to rise twice in 2018.

It just shows trying to predict Australian dollar exchange rates long term is very difficult however I believe the Governor will continue to monitor and if the Australian dollar exchange rates devalue further in the upcoming months the likelihood of an interest rate hike increases.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

When will the RBA raise rates? (and how will this affect the pound to Aussie rate)

The pound to Australian dollar has become more comfortable above 1.70 lately but we are still having trouble sticking above it. My personal belief is that the pound to Australian dollar rate will rise higher through the 1.70’s as the lack of any interest rate cut down under, and the increased prospect of one in the UK, causes the rate to rise. I therefore think it could be many years before we see a rate hike in Australia and agree with some more recent commentators who state it will be 2019 not 2018 before we see the next hike.

The Australian dollar is already weaker as markets agree that any hike next year is less likely, the strength in growth and employment in the Australian economy is high but many question for how long it will last. With savings rates having dwindled in recent years Australians are having to save even more and this will impact consumer spending. The very strong housing market is a cause for concern but raising interest rates won’t necessarily help the boom, but it will make getting on the ladder even trickier for new home buyers and make mortgages more expensive.

Whilst I do not think the UK will raise rates as quick as many expect (some pencil in November) I do expected much increased rhetoric around the topic over the next couple of months and this could well send sterling higher. If you are looking to buy or sell Australian dollars this shift will not occur in a straight line, we will undoubtedly see a rather volatile path.

GBPAUD could easily rise to say 1.76 or 1.80 at the top end in the next two months before as UK rates expectations cool and the prospect of any Australian hikes become clearer, see the rate back into the lower 1.70’s or even sub 1.70 again.

If you need to buy or sell Australian dollars for pounds and wish to get some insight into market movements and strategy to maximise your currency exchange we can help with a personal service and excellent rates. For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

GBP AUD Finds Support at 1.70 (James Lovick)

The pound remains on a stronger footing against the Australian dollar this afternoon after all the recent political developments. The Australian dollar has come under some pressure after the elections in New Zealand and Germany have created ongoing uncertainty for the Aussie. The hung parliament which has come about in New Zealand could take weeks before a coalition government is formed.

Meanwhile in Germany it could take 2-3 months before a government is formed which is also seeing some investor caution which doesn’t bode so well for the Australian dollar. However in the case of Germany it will come about that Angela Merkel will serve her fourth term as Chancellor and so when confidence is restored this should help strengthen the Aussie.

Clients looking to buy Australian dollars with pounds are seeing a good opportunity to purchase although the pound did see a wobble on Friday after the eagerly anticipated Theresa May speech in Florence did not lift the pound. Brexit negotiations were kick started yesterday and any developments here are likely to direct GBP AUD exchange rates. Any positive noises from Brexit secretary David Davis or his counterpart Michel Barnier could help see the pound move higher especially if the door to discussing a future trade deal between the UK and EU is opened. For the moment levels have broken back over 1.70 for GBP AUD presenting good levels for dollar buyers.

Economic data down under is quiet this week and focus is likely to move to the escalation of tensions between the US and North Korea. The Australian dollar is perceived as a riskier currency so any further escalation between the two could see the dollar come under added pressure. Those clients looking to sell Australian dollars should be aware of the situation as any deterioration could see the Aussie fall sharply lower.

If you would like further information on sterling or Australian dollar exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

GBP/AUD Rates Touch 1.70! (Matthew Vassallo)

GBP/AUD exchange rates hit 1.70 overnight, with the Pound finding support over recent days.

The reason for the improvement is more likely tied to a report released by Australian lender Westpac, which suggested they do not expect to see an interest rate hike in Australia until 2020.

This news is a far cry from the three rate hikes that had been predicted by the ANZ bank by the end of 2019 and the markets have reacted accordingly to the news.

Investors had probably started to factor in further rate hikes but with this scenario now called into question, investors have started to pull funds away from the AUD, devaluing it as a result.

Whilst a decision on interest rate rises rests with the Reserve Bank of Australia (RBA), it does look increasingly unlikely one will occur in the short-term and despite continued pressure on the UK economy due to Brexit negotiation fears, it may be wise to protect any short-term AUD sell positions around the current levels.

Looking at the UK economy and the current market focus still centres very much around Brexit and how negotiations are likely to fair over the coming months.

Theresa May’s much anticipated Brexit speech went ahead on Friday, as members of the press waited in anticipation for an insight into the UK’s revised strategy for leaving the single bloc.

Whilst her bullish tone was expected, she reaffirmed many of her previous comments and as such I was left fairly underwhelmed by much of what was said.

The key points focused on rights of EU nationals, a smooth Brexit transition and a commitment to on-going payment subsidies to the EU, following the UK’s transition to a single state entity. The PM once again reiterated that the UK would not remain part of the single market or customs union, as the fallout continued following what has fast become one of the highest profiled and messy divorces in the history of politics.

Despite her positive, almost nostalgic undertone, it was interesting to note that she still believes that “no deal is better than a bad deal”.

It will be interesting to note how EU leaders and subsequently the markets react to the key points of her speech but nothing she said gave any indication that negotiations were suddenly going top progress positively, or at any great pace.

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.

 

 

Could we see further advances for Sterling against the Australian Dollar? (Daniel Johnson)

May misses and opportunity to boost investor confidence

On Friday we Theresa May speaking Florence in regards to the current stance for Brexit talks. It was widely anticipated that she would provide some form of clarity on how negotiations are set to proceed. We expected to hear on the amount the UK were set to pay to leave the EU, time scale and whether we would be looking at a hard or soft Brexit.  This was a clear opportunity for May to calm investors and give a positive outlook on the pending negotiations, she failed. GBP dropped in value following a fall in investor confidence with negotiations now looking to take a lot longer than the two year target. May also announced “no deal was better than a bad deal.” The potential o fa rate hike is what is causing Sterling to gain strength, however I am of the opinion this is not justified. Wage growth is down, inflation is up and unemployment data is not as impressive as some perceive sue to the introduction of zero hour contracts.

Governor of the RBA not convinced on the health of the Australian Economy

We have seen GBP/AUD above 1.70 today which is a key resistance point. There is still room for potential gains for the pound against the Aussie, although I do not think we will breach 1.75 short term. The governor of the Reserve Bank of Australia, Philip Lowe is not as optimistic as some in regards to the future of the Australian economy. Iron ore, Australia’s primary export is is down in value and Australia’s biggest trade partner, China have recently has their credit rating down graded. Australia also has a similar problem to the UK with wage growth down. If there are rapid rises inflation this could cause problems, if consumers can’t afford to pay over inflated prices the economy will suffer.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

A dramatic fall for the Australian dollar

Towards the end of last week the Australian dollar lost value against all of the major currencies due to RBA governor Philip Lowe announcing that it was unlikely the RBA would raise interest rates anytime soon.

Within my last article I suggested this would be the case, as the Governor in recent months has made it clear if the Australian dollar continues to strengthen in value, this could have a negative impact on GDP and the amount of jobs that are created.

The Australian dollar also took a tumble due to a further fall in the commodity iron ore. Iron ore is Australia’s largest goods export and over the last six trading sessions is down 13.7%. There is a direct correlation with iron ore and Australian dollar exchange rates. When iron falls exchange rates fall when iron rises exchange rates rise.

However the Australian dollar didn’t devalue much against sterling this week as Theresa May’s lack lustre speech in Florence Friday left the currency markets wanting more and therefore a sell off of sterling occurred. The PM gave no indication to how much the UK would pay the EU when the UK departs and this is what the market was anticipating.

It’s a quiet week for Australian economic data releases, the only release to look out for is Private sector credit Friday morning however this isn’t normally a big market mover. For people that are buying or selling Australian dollars this week should also analyse the other currency that you are converting.

If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (AUDUSD, AUDEUR, AUDGBP) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company drl@currencies.co.uk.

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

Dayle Littlejohn