Daily Archives: February 9, 2018

Brexit jitters causes the Pound to fall against the Australian Dollar (Tom Holian)

In what has been a very volatile week on global stock indices the GBPAUD exchange rate has started to move in a negative direction during the course of trading on Friday.

After touching close to 1.80 against the Aussie Dollar on Thursday the gains have now been eroded.

The Pound rallied on Thursday afternoon following the Bank of England’s latest interest rate announcement.

Although the central bank kept rates on hold there is now an increased chance that a rate hike now may come as early as May.

UK growth forecasts for both this year and next were raised which gave the Pound a real boost against the Australian Dollar.

However, since early on Friday morning the Pound has once again started to fall against the Australian Dollar.

UK Trade Balance figures showed a decline on Friday morning and combined with comments from EU Chief Negotiator Michel Barnier this led the Pound to decline against all major currencies.

Barnier suggested that the transitional period which takes place between March 2019 and December 2020 is far from getting resolved which could cause problems for the UK when it next meets in March to discuss phase 2 of the Brexit negotiations which are to be focused on future trade agreements.

The Irish border issue appeared to be sorted back in December but now this could raise issues with the movement across the border and the uncertainty has caused the Pound to fall.

As we go into next week the UK releases its latest set of inflation data predicted to come out at 2.9%. With inflation continuing to remain high if we see the data come out the same or higher than expected this could see the Pound make a recovery as it provides further support for a future interest rate hike.

If you have a need to buy or sell Australian Dollars in the near future 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. 

Having worked for one of the UK’s leading currency brokers since 2003 you can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.


Australian Dollar liable to global stock market sell off and RBA warning leads to Australian Dollar weakness

The Australian Dollar has had a fairly choppy week so far this week, generally losing ground against most major currencies due to comments from the Reserve Bank of Australia that indicated that any interest rate hikes may be quite far away, and also due to global uncertainty in the stock market, seeing the Dow Jones and other indexes around the world drop considerably over the week.

The issue with the Australian Dollar is that it is perceived as a riskier currency, therefore when you tend to see a volatile global market, and uncertainty politically or with economic data  around the world you tend to see the Australian Dollar weaken, as investors will shy away from riskier currencies and head to safer havens, such as the U.S Dollar and the Swiss Franc.

As I indicated earlier in the week I do feel that the Australian Dollar may have a tough period coming up, with interest rates due to be raised by various central banks around the world this may lead to a further flow out of the Australian Dollar and into more attractive currencies with better returns on investment.

The RBA also released a monetary policy statement last night, and although economic data is still fairly good there are concerns around slowing wage growth and inflation rising too.

Poor wage growth and high inflation is a big issue for an economy, as it means the cost of goods and services is going up yet the amount the general consumer has to spend is not rising in line with it, another potential issue for the Australian Dollar going forward.

Not only do we offer up to date market information for our readers but we can actually help you with any currency exchanges too, with top foreign exchange rates and a smooth and efficient service. With over ten years of experience in foreign exchange I would like to think I could be an excellent addition to your armoury when taking on these volatile markets. Feel free to contact me (Daniel Wright) directly on djw@currencies.co.uk and I will be more than happy to help you personally or to get you a live quote.