Monthly Archives: December 2017

Pound vs Australian Dollar Forecast for 2018 (Tom Holian)

The Pound has had a fairly good year vs the Australian Dollar getting close to hitting 1.80 on a number of occasions towards the end of the year.

The commodity based currencies including the AUD, NZD and ZAR have all weakened generally during 2017 owing to the global slowdown.

Owing to the ongoing Brexit saga the Pound has had an indifferent year against both the Euro and the US Dollar but has sustained its strength against the Australian Dollar.

However, what has become apparent is that Australia could soon lag behind the interest rates set out by the US which could cause a lot of global investors to shy away from the Aussie Dollar next year giving the Pound some support.

The Australian Dollar is also heavily reliant on what happens in China and with the value of iron ore having moved a huge amount during the last few weeks both up and down this has caused a lot of volatility for GBPAUD exchange rates.

I think one of the biggest factors influencing GBPAUD rates is that of Brexit so 2018 could be the defining year as to whether we see the Pound getting back to its recent highs vs the Australian Dollar.

In the short term on Wednesday the latest Commodity Index is due for release which measures the values of commodity prices which is an important factor in the value of the Australian Dollar as they are such a large exporter as natural resources.

Therefore, if you’ve got a short term currency transfer to make then keep a close eye out on what happens early Wednesday morning.

If you have a currency requirement to make during 2018 and would like to save money when buying or selling Australian Dollars compared to using your own bank then contact me directly for a free quote.

Having worked for one of the UK’s leading currency brokers since 2003 I am confident of being able to save you money when making a currency transfer.

For further information or a free quote contact me directly Tom Holian teh@currencies.co.uk and I look forward to hearing from you.

Happy New Year and thanks for reading!

 

GBP AUD Slides Lower as RBA Hints at Rate Rises in 2018 (James Lovick)

GBP AUD has fallen lower over this festive period with levels for the pair now sitting at 1.7245. The Aussie was given a boost in the run up to Christmas after the Reserve Bank of Australia (RBA) signalled that it was open to the idea of raising interest rates in the New Year. Clients looking to buy Australian dollars with sterling should pay particular attention to Brexit developments as discussion moves on to the thorny issue of trade.

The Australian dollar had come under pressure after the US raised interest rates in December which put both Australia and the US on a level playing field in terms of where rates are set at 1.5%. The US seeks to reach an equilibrium rate of around 2.5% and this is likely to have a damaging impact on the Aussie as funds move back to the higher yield in the US dollar.

The US has signalled that there is likely to be another two or three rate rises throughout 2018 and this is in theory should help strengthen the US dollar whilst weakening the Australian dollar. The change of stance coming from the RBA however is helping support the Australian dollar as those future interest rate expectations between the US and Australia appear to be more aligned.

As we move into the New Year expect to see a lot more mileage in the Australian dollar depending on events coming out of the US. In my opinion we are likely to see a much faster approach from the US to raising interest rates and this should put pressure on the Aussie. Any jawboning from the RBA however is likely to result in considerable market reaction.

As for GBP AUD expect considerable volatility from any ongoing Brexit developments. 2018 is likely to see major developments as the discussion moves on to the terms of trade. Clients looking to buy or sell Australian dollars can get in touch with me at jll@currencies.co.uk to discuss how these events will have a direct impact on any pending requirements you may have.

Key Factors that will effect AUD (Daniel Johnson)

Housing Bubble could have long term consequences for the Australian economy

This week we saw the Reserve Bank of Australia (RBA) minutes and the tone was positive as the economy starts to look healthier. This could pave the way for future monetary policy changes. The main worry down under at present is consumer spending. We recently witnessed the biggest fall in retail sale in over four years. This can be put down to the inflated housing prices in high wage growth areas. Consumers have been forced to curb there spending and spend their money on necessities. Property prices continue to rise due to foreign investors being willing to pay the over inflated prices which is hurting the natives. (I use that term loosely) The housing bubble could hurt the Australian economy long term. New Zealand’s new Labour government recently put in place a law to stop foreign investors buying residential property, it will be interesting to see how this pans out.

Iron Ore price can cause swings in Australian Dollar Value

Iron ore is Australia’s biggest export and is predominantly purchased by the Chinese. A client recently sent me a very interesting article which clearly shows a correlation between iron ore price and the value of the Aussie. Although Chinese growth is impressive it has been slowing and when there is a dip iron ore price falls due to the fall in demand, this then hits the Australian Dollar. A more stable economy needs a more diverse form of income rather than heavy reliance on a specific raw material. If you have an Australian Dollar requirement it would be wise to keep an eye on iron ore price.

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.

GBP/AUD Forecast – Where Next for the Pound (Matthew Vassallo)

GBP/AUD rates have levelled out this week, with the AUD finding plenty of support around 1.75.

The Pound’s recent strength has cooled and although the UK economy remains under pressure, the AUD is also struggling to make any major impact.

Looking at Sterling at its downturn in fortunes has come despite the recent announcement that EU leaders have agreed to move Brexit talks on to the second phase.

The news, which was confirmed by European Council president Donald Tusk, finally put to rest any concerns investors had that talks were still not progressing as indicated.

Many analysts had predicted that this could help alleviate further pressure on the Pound, which in turn could have driven support higher and the Pounds value up as a result.

However, the opposite seems to have occurred and investor confidence has waned. This is likely due to how tough the next round of Brexit talks are predicted to be and the potential obstacles that could harm any separation deal being agreed.

We are now entering the key components of the UK’s separation from the EU and the relationships that will remain, particularly in terms of what trade deal the UK will be granted with its closest neighbours.

We are likely to see tensions rise and I would be surprised if this didn’t have a negative impact on Sterling’s value over the coming months. The first round of negotiations were far more tedious than most experts had predicted and it does make you concerned about how the UK government will navigate the second phase of talks.

Despite this current negative perception the AUD is also under pressure, as Australia’s current housing bubble is set burst. High property prices in Australia’s most affluent areas becoming too expensive for most people to purchase and with a slowdown in their exports (Australia relies heavily on this sector of its economy), could the AUD be in for a rough ride in 2018?

Personally, I would be tempted to remove any market risk considering the uncertainty in both the UK & Australian economies and secure any short to medium-term currency positions whilst Sterling continues to trade above 1.70.

If you have an upcoming GBP/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.

Rates improve to sell Australian Dollars into Pounds (Tom Holian)

The Australian Dollar has improved during the course of December after getting close to breaking past 1.80 just over a week ago.

The Australian Dollar has fought back against Sterling after the problems with the ongoing saga of Brexit.

Indeed, although talks have been allowed to move forwards towards phase two of the discussions we have not really seen any gains for the Pound vs the AUD as we are still headed for a long period of uncertainty ahead.

Australian employment figures have come out a lot better than expected recently which has provided the Australian Dollar with some recent strength against the Pound.

This has led to the possibility of a potential interest rate hike coming in Australia as it means the economy could possibly cope with a further rate hike and that has strengthened the Australian Dollar against the Pound.

Indeed, with all the uncertainty from the Brexit saga ongoing all the commodity based currencies including the NZD & South African Rand have improved against Sterling.

On Tuesday, Australia releases its latest minutes from the last RBA meeting.

If we see any hints towards a rate hike or any appetite for this in the new year then we could see further strength for the Australian Dollar against the Pound so make sure you’re ready to move quickly if required.

If you have a need to make a currency transfer in the coming days, weeks or months then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

 

Best rates to sell AUD for pounds in 1 month

The pound has been performing much better against most currencies lately including the Australian dollar. The GBPAUD price has recently been hitting the best time since the Referendum vote to buy AUD with pounds. However in the last week a much stronger Aussie has seen the rate drop to the 1.73’s presenting a fresh opportunity for AUD sellers looking to buy pounds. If you need to buy or sell AUD then getting your timing and the price right can save you thousands.

A much better employment report for Australia has helped the currency to rise as it makes the likelihood of any interest hike down the line more likely. The Aussie had actually been much weaker lately, in part due to speculation that the RBA (Reserve Bank of Australia) would keep their base rate on hold for longer. The latest Unemployment news from Australia was much improved with lots of news jobs being created and participation rates increasing.

The Aussie is strong against the pound too because of fresh uncertainty over what lies ahead with the Brexit deals and we can be expected in 2018. We might have secured a deal so far for the more short term and pressing issues, but there is still a long way to go in order to see Brexit fully in full swing. This may take years and the recent improvement in the outlook for the pound, whilst welcome, can surely not be here to stay?

Next week is some further key economic data which could easily trigger market movements, overall I expect markets to be trading on political developments with Brexit. Since it is also holiday season thinner trading volumes in the market could create some extra opportunity!

If you have a transfer to make and wish to get the best rates and latest news, please speak to me Jonathan by emailing jmw@currencies.co.uk

US Monetary Policy Outlook strengthens the Australian Dollar (Daniel Johnson)

FED Hike effects AUD

Before the recent US rate hike by the Federal Reserve the Australian Dollar had weakened against the majority of major currencies in anticipation of the hike. The market moves on rumour as well as fact, which is why the damage had been done. The Australian is appealing to investors due to it’s high returns and  relative safety. But, now following the recent US rate hike to 1.5% the US interest rate and the Australian interest rate are on par. The last time this occurred was between 1997 and 2001. The US Dollar is considered a safe haven currency and due to it now offering the same returns as the Aussie investors have been leaving the Australian Dollar in their droves.

The Australian Dollar has actually strengthened following the decision. This was due to the FED press conference where future monetary policy is discussed. It was stated there would be up to three further hikes next year, but the word “gradual” was used in regards to when they would be implemented. This was unexpected as many predicted a more bullish, optimistic tone.

When rumour starts to filter through that these hikes are going to occur this could well  cause Australian Dollar weakness. If you are an Australian Dollar seller, be wary.

Strong employment Data boosts AUD

Another factor in Aussie strength was strong employment data, The Australian Bureau of Statistics saw employment move higher to 61’600. The highest levels since October 2015. There is still not enough positive data to warrant a rate hike down under.

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.

GBP/AUD Forecast – UK PM Theresa May Under Following Commons EU Vote (Matthew Vassallo)

UK Prime Minster Theresa May is dominating headlines this morning, following her Commons embarrassment over a key Brexit vote.

May has flown to a summit in Brussels, hours after Conservative rebels backed an amendment to give them the final vote on any final Brexit deal.

This was seen as a backhanded move by many and once again undermines the PM’s position.

It seemed as though the government were finally making progress in Brexit negotiations but this hurdle could heap pressure on Sterling over the coming days.

GBP/AUD rates have remained fairly flat despite these developments, with the pair still trading above 1.75.

Investors risk appetite for the Pound may well deteriorate as this story develops, so it could be time to lock in any short-term GBP/AUD currency positions and avoid the risk of a potential downturn.

Sterling has made gains of late and this improvement has been supported by what seemed like a breakthrough in Brexit talks. It was also boosted by an underlying concern regarding rising property prices in Australia’s most affluent cities Sydney & Melbourne and a drop in demand for Australia’s vast supplies of raw materials.

The Australian economy is heavily reliant on their export industry, so any dip in this sector generally has a negative knock on effect for the AUD.

Looking at the UK and although there has been no confirmation of the details of a potential Brexit deal, it seems as though agreements have been made over the Irish border set-up, the protection of EU nationals and the final settlement figure (rumoured to be as much as 50 billion EUR), that the UK will pay to the EU following its separation.

Whilst this is still being touted as the next step, reports over the past couple of days have indicated that the UK & the EU were not necessarily on the same page. Brexit secretary David Davis indicated in an interview over the weekend that the touted “divorce” bill was not binding and would not be paid if the UK did not receive an advantageous trade deal.

This was widely criticised and rebuffed by key EU figureheads and could put pressure on Sterling over the coming days.

As such I would be tempted to take advantage of Sterling’s current levels and remove any risk in what is still an extremely uncertain market.

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.

Is the Pound now overvalued against the Aussie Dollar? (Joseph Wright)

After a strong run for the Pound in recent weeks the pair remain lodged just below the 1.80 mark, which leads me to believe that there may be ceiling for the pair at 1.80 moving forward.

Last week the pair hit a 17-month high after the Pound has benefited off the back of positive Brexit talks, with the current Prime Minister, Theresa May receiving plaudits for her efforts addressing the issue of the Northern Irish border along with the Brexit bill.

Whilst there has been a lot of positive sentiment surrounding the UK and the Pound recently, the Aussie Dollar has been coming under pressure due to fears of a slowing economy down under.

The Aussie Dollar has also been coming under pressure as the Fed Reserve Bank in the US has hiked US interest rates twice (soon to be 3 times if economists predictions are correct) this year. The increasing interest rates in the US have increased demand for the US Dollar and this has seen the Aussie Dollar drop as demand has slowed as investors prefer to hold funds in US Dollars now they can get a return.

Moving forward I think that whether or not the Brexit process continues to progress will determine whether or not the Pound climbs, and it’s certainty worth following the GBP/AUD pair when they trade around 1.80 as this benchmark level is key in my opinion.

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.

GBP AUD Rates ahead of Key EU Summit (James Lovick)

The Australian remains under considerable pressure as it has done for some time and this is unlikely to change shape any time soon. One of the big factors having a negative impact om the Aussie dollar is what is happening in the US. Where Australia had maintained some of the highest interest rates in the western world, the US is now looking to claim that spot.

The US is widely expected to raise interest rates at the US Fed meeting next week which will take rates up to 1.5%. Looking forward and rates are expected to climb higher with another two or three to be expected throughout 2018. The Reserve Bank of Australian on the other hand have made it clear there is no urgency to raise rates down under and will not follow other economies.

Interest rate rises can create strong improvements in a currency and the lack of action down under is helping to see the Aussie weaken as funds move out of Australia where the return on investment starts to become less.

GBP AUD

Those clients with a requirement to buy or sell Australian dollars should pay particular attention to the EU summit which starts tomorrow and concludes on Friday. This is a major event in the diary as it will confirm where or not sufficient progress has been made by Britain in the Brexit negotiations to move on to phase two which will tackle the future trade arrangement.

After the breakthrough last Friday where Theresa May was able to broker a deal which covered the Irish border and where all parties agreed it is now expected that talk on a trade deal will be able to commence in the New Year. This in my view should be seen as very positive for GBP AUD exchange rates and a move towards 1.80 could become a reality.

There is no guarantee that talks will move forward especially after some political upsets this week between Brexit secretary David Davis and EU leaders although the general mood is looking positive. In my view there is a high chance that the pound will strengthen at the end of this week.

Those clients with a pending requirement to buy Australian dollars would be wise to get in touch ahead of this key EU summit as there is likely to be a considerable market movement on the back of it. Please feel free to contact me James at jll@currencies.co.uk