Monthly Archives: April 2018

Australian interest rate decision to impact the Australian Dollar vs Sterling

The Reserve Bank of Australia are due to meet overnight to decide what they will be doing with monetary policy.

As far as I’m concerned a potential interest rate hike is a long way off for a number of reasons. Trade with China appears to be slowing down recently and this is why we have seen some Australian Dollar weakness against Sterling during the last few months.

Indeed, as China is such a large trading partner with Australia any negative announcements will impact what happens to the Australian Dollar and also the decisions due to be made by the RBA.

The bond yields in the US are now as high as 3% which is the highest level since 2011 and this has encouraged global investors to bypass the Australian Dollar in favour of the US Dollar.

The Australian economy has also been struggling as the price of iron ore has been falling which is the country’s biggest export as well as the Chinese equities market and this is likely to have a negative effect on Australian GDP going forward.

One of the main responsibilities of a central bank is to use policy to control both GDP and inflation so this is another reason why I cannot see interest rates going up for a very long time.

I think we’ll see GBPAUD exchange rates going in an upwards direction overnight so if you’re considering buying Australian Dollars then it may be worth seeing what happens with tonight’s monetary policy announcement.

On Wednesday the Chinese release their latest manufacturing data and I think another slowdown could see GBPAUD exchange rates continue with their gains.

If you have a currency requirement to make and would like to save money compared to using your own bank then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Will the Australian Dollar continue to strengthen or will it weaken after the RBA Meeting?

The next key data release for Australia will come on Tuesday when the Reserve Bank of Australia will meet to discuss their latest monetary policy decision.

The Australian Dollar has been struggling particularly vs the Pound recently when it hit the lowest level since the Brexit vote back in June 2016.

However, towards the end of this week UK GDP for the first estimate saw the slowest pace of growth since 2012 which led to Sterling collapsing against the Australian Dollar as well as a number of other different currencies.

This is good news for anyone looking to sell Australian Dollars to buy Sterling but the question is how long will this last?

I think the gains could possibly be short lived for the Aussie Dollar as have have seen a consistent weakening of the Australian Dollar over the last few months and therefore I think this movement may not last for too long.

On Tuesday, the Reserve Bank of Australia will hold their latest interest rate decision and the current expectations are for a rate hike to come summer 2019.

Inflation in Australia has been an issue for the RBA and therefore I cannot see any positive rhetoric in terms of changing the current expectation and this is why I think we could see the Pound fighting back following the announcement on Tuesday.

Therefore, if you’re considering buying Australian Dollars with Pounds it may be worth being patient and seeing if we have a recovery on Tuesday.

Having worked in the currency markets since 2003 for one of the UK’s leading currency brokers I am confident not only with being able to offer you bank beating exchange rates but also help you with the timing of your currency transfer.

To find out more or for a free quote then email me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

BOE May Rate Hike now in Question (Daniel Johnson)

GBP/AUD in detail

Following a host of positive data from the UK last month we have seen a complete reversal. We saw a fall in inflation, (which is now below average wage growth), retail sales were shocking, predicted to be – 0.5% coming in at -1.2% and today a fall in GDP to 0.1% when 0.3% was the expectation.

A rate hike from the Bank of England (BOE) was widely expected in May, however Mark Carney, Governor of the BOE said in a recent BBC interview that a hike may occur later in the year. This along with the poor run of data could well stop the rate hike occurring. Despite this I would not rush out and sell my Sterling to buy Aussie. I still believe we are range bound between 1.80-1.85.

If it drops below 1.80 for more than a few days it may be time to consider moving if you have to move short term. Personally I would hang on for the high 1.83s or 1.84s. If you have real concern consider a Stop/Loss contract for protection.

The Reserve Bank of Australia (RBA) has a quite negative outlook in regards to hiking rates, there is little chance of a hike this year. If you take into consideration the Federal Reserve have already raised rates to 1.75% and intend to hike rates as many as two further times this year you can see why investors are moving from the Aussie to the Greenback. The US-China trade war could also be damaging to the Aussie. If Chinese growth is hindered by tariffs you would expect Australia’s primary export, raw materials to fall in demand and price which would be bad news for the Australian Dollar.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Thank you for reading.

UK GDP causes the Pound to plummet vs the Australian Dollar

After hitting the best level to buy Australian Dollars with Pounds since the Brexit vote back in June 2016 the Pound has plummeted this morning after UK GDP figures came out worse than expected with the economy growing at its slowest rate in 6 years.

GDP fell to 0.1% which was lower than the expectation and showed a fall compared to the previous quarter which was 0.4%. This has now decreased the chances of an interest rate hike at next month’s Bank of England meeting due to take place on 10th May. In the last fortnight the chances were as high as 85% of a rate hike coming next month as average earnings outpaced inflation for the first time in a long time.

However, as the Bank of England are responsible for changing policy to help with both inflation and growth this poor data release has almost put paid to a rate hike at next month’s meeting and this has seen 2 cents wiped off the value of a GBPAUD trade of the difference of £1,250 on a currency transfer of AUD$200,000.

With the UK economy growing at its slowest pace since 2012 manufacturing and construction were two of the big casualties during the first quarter of this year.

Although the weather was poor and unusually cold during the first part of the year many economists have suggested that this was not too much of a factor.

We could see even further movement on the currency markets later on this afternoon when US GDP data is released at 130pm UK time. As the world’s leading economy, the announcement will often affect global attitude to risk so if you’re in the market looking to make a trade then this could be very influential for GBPAUD exchange rates.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident of being able to help you save money compared to using your own bank.

For further information or a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

 

 

 

AUD Forecast – Australian Economy Continues to Rally but Global Trade Fears a Major Concern (Matthew Vassallo)

The Australian economy continues to surprise many and despite its recent slowdown, has still managed to avoid a recession for the best part of 30 years.

In fact with growth expected to drop only slightly to 2.7% this year, there are still many reason to remain optimistic for any clients looking to execute an AUD currency exchange over the coming months.

Despite this optimistic outlook a dark cloud continues to hang over the Australian economy. US President Donald Trump’s on-going trade wars with China are a serious cause for concern. China remains Australia’s largest trade partners and whilst this relationship continues to blossom, any tariffs China introduce to counter Trump’s restrictions, could have devastating effects on the Australian economy.

Whilst it is likely that Australia’s exports would be not be subject to such measures, any pressure on global trade is likely to have a negative effect on commodity based economies such as Australia’s. This in turn would likely weaken the AUD, so clients need to be keeping a close eye on developments in this sphere.

Looking at GBP/AUD rates and the AUD now seems to be finding plenty of support around 1.85 and with Brexit talks moving back into the spotlight, the Pound could find itself back under pressure over the coming days.

UK Prime Minster Theresa May will be wondering what else could go wrong, as the government continue see their grip around any upcoming Brexit decisions weaken.

With talks on-going, it will be interesting to see how the markets react to any further stumbling blocks, with any slowdown in the government’s ability to make decisions likely to put pressure on the Pound.

If you have an upcoming 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 winning 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.

Will GBPAUD fall below 1.80?

The pound to Australian dollar exchange rate could now enter a very volatile period as we get key news from both central banks in the Eurozone, United States, Australia and also the UK! This should see movement on exchange rates as the market digests any shifts or changes in monetary policy and investors shift funds around to take stock of the changes.

The pound to Australian dollar exchange rate has been rising which has seen the GBPAUD level touch some of the best rates since the Referendum 2016, this is presenting an excellent opportunity to buy the Aussie with pounds which may not last. Important economic data for the UK is tomorrow relating to GDP but what will more than likely see extensive volatility on the Aussie is global attitudes to risk sentiment.

The Australian dollar is very sensitive to global sentiments on interest rates and where the AUD had previously found itself as a very strong currency owing to its higher interest rates, the currency has lost value as other central banks become more positive about raising and indeed, do raise their interest rates.

The US interest rate is now higher than the Australian one and this has made the Australian dollar lose value against the US dollar as the US dollar becomes more attractive to hold. If you have any currency transfer buying Australian dollar the RBA (Reserve Bank of Australia) interest rate decision next week could also be a big market mover.

If you are looking to by or sell Australian dollars and wish for some insight as to what might happen in the future with any currency transfers that you will be looking to make, please feel free to speak to me Jonathan Watson by emailing me on jmw@currencies.co.uk.

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

Australian Dollar Weakens on Uncertain Outlook (James Lovick)

The Australian dollar remains under pressure having fallen to a 4 month low following a decline in commodity prices including the price of metals. The US dollar has also seen a rise in US bond yields and this is something that impacts negatively on the Aussie. The Australian dollar has traditionally performed well when global investors have invested their funds into the higher yielding Australian dollar when interest rates have been considerably higher than in the US for example. The tide has turned now though after the US has begun raising interest rates and looks set to continue doing so throughout 2018. Funds have been moving out of the Aussie and back to the safety of the US dollar which has resulted in a stronger US dollar and a weaker Aussie.

The trade tariffs which have been imposed by the US and China also weigh heavily on the Australian dollar due to the wealth of raw materials down under and also considering the volume of exports that go to China. Any further signals that trade could slow down and impact negatively on global growth could see the Australian dollar weaken further.

In my view any progress on NAFTA which covers the trade agreement between the US, Mexico and China could end up having a positive impact on the Aussie if a positive trade arrangement can be reached. Pressure is mounting to have a decisions made by the time of the Mexican elections in the summer which could make for an interesting period ahead. Those clients looking to buy Australian dollars with pounds are seeing excellent prices available which are close to 1.85 for the pair. The Bank of England interest rate decision in May is also likely to throw up some sunrises and the rate hike that had been promised is no longer a certainty. In my view it is more likely the Bank of England will pause which could see GBP AUD come under some pressure.

For more information on buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk

Is the RBA’s monetary policy working, and how will this impact AUD exchange rates?

Australian interest rates have been set at 1.5% for around 20-months now. This is the longest period of time the rates have remained the same and interestingly, this is the lowest that interest rates have been in Australia.

Rates were dropped to this level back in August 2016 in order to stimulate the economy after it begun to show signs of a slowdown, and since then the RBA monthly meetings have been non-eventful. This is in stark contrast to back in 2008-2009 when the rates were changed on almost a monthly basis.

There are no changes expected for the next 6-months, which differs to the forecasts in the UK for example where the Bank of England is expected to hike rates at least once this year, with some forecasters predicting up to 4 over the next 18-months or so. The Fed Reserve in the US is pushing forward with the most aggressive monetary policy changes within the developed world, and this has negatively impacted the value of the Aussie Dollar as people are beginning to pool funds in the USD now that they can get a better return than when they hold funds in AUD.

Due to the Aussie economy not picking up much steam despite the low rates, and the RBA’s tentative approach to raising rates due to fears over an overheating house market, I think that we may see the AUD continue to lose value as the year progresses.

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.

Interest rate hikes look extremely unlikely

For the first quarter of 2018 Australian core inflation hit 1.9% and headline inflation was 0.4% down 0.6% from the final quarter of 2017. The quarterly inflation numbers support the Reserve Bank of Australia’ stance to keep interest rates on hold for the time being. Many economists are suggesting a hike for the RBA will not materalise until the summer of 2019 and I have to agree which is a problem for Australian dollar sellers.

An interest rate hike has the potential to collapse the property market as many Australian’s have 0% mortgages and others have properties that they struggle to pay for now due to property prices rising over the years. My personal opinion is that average earnings need to rise and inflation would have to become out of control before a hike materialises.

As it is Anzac day tomorrow there are no data releases to look out for tomorrow. The next batch of releases to look out for are import and export price index numbers and both are set to show a steep decline. If this is the case you would expect the Australian dollar to come under pressure further.

In regards to GBPAUD exchange rates, with exchange rates now remaining buoyant above 1.80, the golden question is what is next? UK MPs are set to meet in the house of commons on Thursday to discuss the customs union. With MPs split whether to leave and remain and the PM stating there is no choice the UK has to leave this story could put pressure on the pound.

If you are trading Australian dollars this week, month or year I would recommend emailing me with the the reason for the transfer (company goods, property purchase) and your timescales and I will response with the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage, I would strongly recommend you compare rates as I am confident I will be able to offer you additional savings with your transfer. All you need to do is email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

 

Australian inflation comes in slightly below forecasts, AUD weakness as a result

Today Australian inflation figures were released and fell slightly below analysts expectations, leading to a slight drop in value for the Australian Dollar over the course of the trading day.

Expectations had been for inflation to come in at a level of 0.5% however the figure released only came in at 0.4%, the annual rate posted at 1.95%, this does show that inflation is rising but we are still seeing the level of inflation posting below the target rate that the Reserve Bank of Australia have which is a level of 2.5%.

This will more than likely lead to the RBA now continuing to hold off on any interest rate hikes, and I would still be surprised to see a hike in interest rates for Australia this year, although of course a lot can change in the currency markets over a few months so watch this space!

The reason the lower inflation figures led to a slight drop in value for the Australian Dollar is that this has dampened the chances of an interest rate hike happening in the near term, and an interest rate hike is generally seen as positive for a currency. With the markets moving on speculation as well as an actual event happening, the fact that an interest rate hike is now deemed to be further away for Australia then leads to weakness for the Australian Dollar.

With numerous other central banks around the world inclusive of the U.S and U.K now making their moves and raising interest rates we are starting to see a flow of money come out of the Australian Dollar and moved into these perceived safer currencies as the rate of return is getting closer to that of the AUD if not better.

If you have the need to carry out a large currency exchange involving buying or selling the Australian Dollar and you would like my assistance then I can help you both get a better rate than the majority of brokerages and also help you put together a game plan on the timing of your transaction, which can also make a big difference.

Feel free to get in touch with me (Daniel Wright) the creator of this site on djw@currencies.co.uk and I will be more than happy to contact you personally to explain the various options available to you.