Daily Archives: February 2, 2018

Sterling remains strong despite poor data release (Joseph Wright)

The Pound has managed to hold its ground against the Aussie Dollar today, despite some disappointing data being released earlier today.

It’s emerged that the UK construction sector is relatively flat at the moment, and this is similar to the UK manufacturing sector which also saw disappointing data released recently.

Despite this, the Pound is managing to hold onto its recent gains where the currency has moved up into the later 1.70’s after spending much of last year below 1.70. This suggests to me that the Pound has consolidated at its current levels and I think that there is more of a chance of seeing the pair hit 1.80 than 1.70 recently.

I think the Pound has also been helped by Aussie Dollar weakness which has restricted AUD from regaining any ground. An interesting estimate released recently is that there are forecasts of a 20% decline in iron ore prices throughout 2018, and this comes after the commodity lost quite alot of value recently already.

The reason this is significant is because iron ore is one of Australia’s biggest exports, so therefore a drop in the commodities value is likely to result in a drop in export income for the country.

Those watching this pair should also consider that if there is more talk of a rate hike from the Bank of England in May, we could see Sterling climb even higher.

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.

AUD Forecast – Will Sterling’s Recent Upturn Continue? (Matthew Vassallo)

GBP/AUD rates are trading around 1.78 on the exchange this morning, with the AUD seemingly finding support around this level.

The Pound has found a foothold above 1.75 over recent weeks, with investor confidence seemingly returning to the Pound despite the on-going uncertainty around Brexit.

Whilst the Pound has made positive inroads of late, the current trend may not be sustainable as we head into a key phase of the Brexit talks.

Poor UK Manufacturing data yesterday did little to further boost Sterling’s value, with the Pound struggling to make any impact above 1.78 against the AUD.

With the global markets seemingly improving , there is also an argument to say that investors risk appetite will improve alongside it. Usually this means than they will move funds from the safer haven currencies such as the USD & CHF, into more risky and potentially higher yielding currencies such as the AUD or NZD.

It is interesting to note that the USD has declined of late in line with this theory and it could be that the AUD is in line for a positive run over the coming weeks.

Whilst the currency markets are extremely difficult to dissect, particularly in times of uncertainty, I am not convinced that Sterling will continue on an upwards aggressive curve.

The Australian economy continues to perform well and being a commodity based economy, relies heavily on the export of its vast supply of raw materials. With its largest trading partner China showing no signs of an economic slowdown, this is likely to help support the Australian economy and ultimately the AUD over the coming months.

The Reserve Bank of Australia (RBA) will not want to see the AUD’s value soar, of fear of alienating their trade partners but this undertone is likely to be offset by the on-going concerns surrounding Brexit and its outcome.

These concerns were laid bare by a leaked Government report earlier this week, which indicated that the UK will be worse off after Brexit. The report covered all three Brexit scenarios, including a free trade agreement, access to the single market, or the worst case scenario of no deal being reached at all.

The Government were quick to react and said the findings were only a preliminary assessment but the news is hardly likely to inspire confidence amongst investors.

Therefore despite the Pounds positive run  further pressure over the coming days and weeks is a distinct possibility, as  Brexit talks starting to dominate the headlines once more.

If you have an upcoming GBP or AUD  currency transfers 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.