Daily Archives: February 15, 2018

Will GBPAUD hit 1.80 in February?

The pound has risen against the Aussie to post-Referendum highs recently nudging the 1.80 mark which is presenting some very favourable opportunities for Australian dollar buyers who have so far been suffering since the EU vote. Here at the blog we try and keep clients up to date with the latest news and trends in the market that could influence your decisions on when to buy or sell currency.

The key news driving the GBPAUD this week has been events in the United States with the movement on the stock market and the US dollar triggering some big swings on USD/AUD, which in turn has seen some big movements on GBPAUD. As the Australian dollar lost ground to the US dollar which strengthened following uncertainty over the stock market, the Aussie was weakened against the pound. This is what saw GBPAUD hit the highs of last week.

Flip this all around the soothe of the those stock market fears this week has seen the US dollar lose value as investors have confidence to reinvest in more profitable shores elsewhere like stocks. This has seen the Aussie gain back some ground against the pound. Other factors on the GBPAUD pairing include the Australian Unemployment data released overnight, whilst this didn’t directly see movement on the Aussie it is important.

In underlining the strength of the Australian labour market it leaves the door open to further rate hikes this year but generally the market does not appear likely to want to factor in any hikes. Raising interest rates in Australia almost appears to be necessary in some respects but could prove very damaging.

What we may see is markets gently realising any hikes are unlikely and this could weaken the Aussie. Couple this with some strength fort he pound and GBPAUD could easily test that 1.80 level. If you are looking to make any transfer at 1.80 please speak to us about all of your options and the best way forward to maximise and capitalise on any position you will need to consider.

To learn more please contact myself Jonathan Watson on jmw@currencies.co.uk and I can outline our service and a strategy to suit your situation.

Australian Dollar Holds Steady after Unemployment Data (James Lovick)

The Australian dollar is still seeing an uncertain period with so many factors globally influencing the exchange rate. Overnight has seen unemployment data released which has held firm at 5.5% as expected. The Reserve bank of Australia are paying close attention to the labour market at the moment and are keeping a very close eye on the amount of wage growth down under, something all the central banks are monitoring closely. When wage growth begins to rise it will be a reason for the RBA to raise interest rates although for the moment the figures are still sufficiently weak to make the case for no changes to interest rates.

The RBA minutes from the last meeting will be released next week and will reveal what the central banks thinking from the last meeting. Any suggestion that the RBA will look to raise rates this year and follow in the US Fed’s footsteps could see the Aussie gain although it is my understanding that they are more likely to monitor the situation in light of all the recent volatility in the financial markets. Those clients looking to sell Australian dollars hoping for a move back to 1.70 might have a good while longer to wait.

Clients looking to buy Australian dollars are seeing a good opportunity to buy although the recent rally in the price of sterling has slowed down in the last week with rates coming off the recent highs. The pound is likely to see a lot of volatility in the coming weeks coming from the political arena. There are a series of speeches to be made by British politicians within the British government which should offer more clues as to where Brexit will end up.

UK Prime Minister Theresa May will be in Germany tomorrow and she is likely to make a statement either on Friday or Saturday. If we go back to the Lancaster House speech back in 2017 the pound rallied by almost 2% following the speech and so it should not be underestimated how much the sterling markets could move if more detail over Brexit is offered.

To discuss your requirement and how these events are likely to impact on your own requirement then please get in touch with me at jll@currencies.co.uk