Monthly Archives: June 2018

UK GDP gives the pound a boost vs Australian dollar

This morning at 9.30am UK Gross Domestic Product numbers were revised to 0.2% from 0.1% for quarter 1 which has given the pound a boost against the Australian dollar. The Bank of England in recent weeks have been hinting that an interest hike could occur as early as August and the improvement in GDP certainly helps the cause. For Australian dollar buyers rates have improved by 0.5%.

Another reason why the pound has been making progressive gains against the Australian dollar is that the Aussie has been weakening due to the trade war between the US and China. The US is Australia’s most important defence ally and China the most important trade partner, therefore Australia are stuck between a rock and a hard place. The theory behind it is that further tensions will put further pressure on the Australian dollar and therefore I would expect GBPAUD to break through 1.80.

In other news the EU summit is now over, and the message from the EU is that the UK need to make progression fast. UK Prime Minister Theresa May has called a meeting at her Cheques country side retreat,  and the full cabinet will attend. The rumour on the market is that Theresa May could announce a soft approach which will be outlined in her white paper which should be released early July. I expect this may give the pound a small boost.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

 

 

US-China Trade War causes investors to lose confidence in AUD

GBP/AUD – The pound has made gains against the Australian Dollar of late, predominantly due to investors looking for safe haven investments due to the ongoing trade war between China and the US. Beijing has said it will match US tariffs Dollar for Dollar which is a risky game considering Trump has promised further tariffs if there is Chinese retaliation. US officials are already preparing $100bn in additional tariffs should the Chinese go through with the rumored retaliation.

US total exports to China last year were an impressive at $130bn. A like for like retaliation from the Chinese would have to cover all US exports which could be very detrimental to China.

Due to Australia’s heavy reliance on China purchasing it’s raw materials the Australian Dollar has been losing value. The tariffs could hamper Chinese growth which is causing investor confidence to move away from riskier commodity based currencies.

Bank of England Interest Rate Outlook – Last week we saw the the Bank of England (BOE) interest rate decision, rates were kept on hold, but it appeared a rate hike was drawing closer. The Monetary Policy Committee (MPC) voted 6-3 against a hike which was up from the previous month 7-2. The markets reacted and we saw Sterling make gains against the Aussie.

Current polls are suggesting over a 50% chance of the BOE raising interest rates by 0.25% at the August meeting, and over 90% chance of a hike happening before the end of the year. I am not so convinced, one of the MPC members to vote in favour of a hike Ian McCafferty  is to be replaced by the more dovish Jonathan Haskel. It is unlikely Haskel will vote in favour of a hike in August and this could push a hike further down the road. In fact considering current economic data I do not think a rate hike will be  justifiable this year.

I am of the opinion Sterling is chroincally undervalued due to the lack of clarity surrounding Brexit, but short term there is very little reason for Sterling to make any substantial gains.  1.80 is currently a resistance point although it is being tested, personally considering the current economic situation if  GBP/AUD is in the 1.79s you are in a good position to trade.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take  a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company  trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

 

 

Will the Pound hit 1.80 this week against the Australian Dollar? (Tom Holian)

Sadly the Australian football team’s time at the World Cup has been cut short and similarly with the currency side of things the Australian Dollar has also struggled during the course of the last month as well.

The Trade Wars between the US and China has caused a big problem for the Australian Dollar as China is Australia’s largest trading partner so any negative news will often result in Australian Dollar weakness.

At the moment threats are that the US could impose as much as US$200bn on Chinese goods and this is causing a very big problem for global trade and as the Australian Dollar is a commodity based currency this has been badly affected in the same way as both the South African Rand and the New Zealand Dollar.

GBPAUD exchange rates have been heading in the direction of 1.80 but appear to be hitting a level of resistance just below at the moment. However, I think we could see the Pound rise higher going into next month.

The EU summit will be taking place over the next couple of days and as well as the migrant crisis one of the other main topics for discussion will be the latest developments surrounding the Brexit issue and how the EU will work without the UK.

If the talks go well for the UK we could see the Pound potentially break higher than 1.80 against the Aussie Dollar so make sure you’re well prepared to take advantage of any potential spikes in the Pound’s favour.

We end the week with the final revision of UK GDP figures for the first quarter of 2018 so any revision upwards could also send the Pound in an upwards direction.

If you have a currency transfer to make and would like to save money when exchanging Australian Dollars then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Australian Dollar Weakens on Trade War Escalations (James Lovick)

The Australian dollar has come under a recent wave of pressure losing ground across most of the major currencies this week. The Aussie has lost more than 4% over the last month with a noticeable fall against the US dollar. The Reserve Bank of Australia (RBA) are keeping all option open with regards to interest rate policy and the wording of whether or not interest rates will rise or fall in due course. However the RBA Governor Philip Lowe has indicated that he expects rates to rise and this was made clear when he last spoke.

The reason for the Australian dollars weakness is most likely due to the trade war escalations between the US and China. Whilst I have previously commentated that trade links between Australia and China are very strong and that Australia could be shielded by protectionist behaviour the recent escalation in tariffs is now having a detrimental effect on some of the other commodity currencies such as the Aussie. There is currently a better opportunity to buy Australian dollars.

The concern is that if global growth slows due to a trade war then the riskier currencies likes the Aussie are likely to feel the full force of slower growth and should see their respective currencies weaken. For the moment it’s all eyes on these developments and Trump had really signalled that he would seek to impose another $100 billion of tariffs on Chinese exports if there was like for like retaliation. Expect more developments form this story and potentially additional losses for the Aussie.

GBP AUD

Brexit continues to be the main driver for GBP AUD exchange rates and should see a volatile period ahead with the EU summit next week. British proposals on the future relationship should be made public very shortly and are likely to appear after the EU summit. The response form the EU as to progress so far will be very important for the pound and any escalation in tensions or the
potential for a no deal scenario is likely to result in sterling weakness. There is still an excellent opportunity for clients looking to sell Australian dollars. In my view once a deal thrashed out then the pound should strengthen materially. Although there is a risk of a no deal scenario which would be sterling negative, in my view this does not seem the most likely outcome and I am bullish for the pound in the medium term.

To discuss how these events will directly impact on your own currency requirement and how to achieve the best rates of exchange then please get in touch with me James at jll@currencies.co.uk

Hawkish Bank of England comments push the Pound higher, will GBP/AUD breach 1.80 again soon?

Despite the Pound to US Dollar rate trading at a 7-month low against the US Dollar, the currency has actually been boosted against most major currency pairs today.

The reason for the boost to the Pound to Aussie Dollars value can be put down to the Bank of England’s comments and the voting pattern of the Bank of England members. The Aussie Dollar lost a lot of value against the Pound today which is why the focus of this blog is on that particular pair.

There are now 3 members of the Bank of England that wish to increase interest rates in the UK, and this is one of the reasons for today’s boost to Sterling exchange rates. The highest the GBP/AUD pair have hit today is 1.7979 although the pair have since slipped off which to me demonstrates that there may be resistance at the 1.80 mark as we’ve previously seen.

There isn’t expected to be any rate hikes from the Reserve Bank of Australia until next year, so I do think that the Pound will climb against AUD should the hints at a rate hike later in the year from the BoE materialise.

With a quiet end to the week in terms of data I’m expecting to see AUD exchange rates driven by sentiment.

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.

Bank of England to influence GBPAUD exchange rates (Dayle Littlejohn)

Today the Bank of England are set to release their latest interest rate decision and this event has the potential to have an impact on GBPAUD exchange rates. At the beginning of the year the Bank of England were hinting that an interest rate hike was imminent and due to a poor run of UK economic data interest rates were kept on hold and the pound lost value against the Australian dollar.

Today looks like we will receive similar commentary as the latest Q2 growth figures were a mixed bag, wage growth construction output and industrial production all missed the consensus. Arguable the only recent economic data release that exceeded expectation were the retail sales numbers.

My personal opinion is that the vote will be split 7-2 in favour of keeping interest rates on hold, which will be a slight non event. However Governor Mark Carney will talk down the chances of a rate hike in the foreseeable future due to the recent flurry of economic data, Brexit negotiations and trade wars. Arguably there is a good chance that buying Australian dollars with pounds could come more expensive throughout the day.

If you are buying or selling Australian dollars in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk. If I haven’t covered your currency pair please outline the pair you are converting. 

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Could the Pound make further gains this week against the Australian Dollar?

According to many sources the Australian Dollar could be under real pressure in the long term as the Chinese economy continues to slow and the US Federal Reserve continues on their path of raising interest rates.

The Fed has already raised rates 7 times since December 2015 and have already increased rates twice during the course of this year as well.

The Australian Dollar has hit its lowest point vs the US Dollar in twelve months and this has also been caused by the ongoing Trade Wars between the US and China.

The Australian bond yields have now dropped below that offered by US Treasuries and this could get even worse as as the Fed continue their path of raising interest rates later this year.

At the moment the view from the Reserve Bank of Australia is that they are likely to keep interest rates on hold for a long period of time and this is why the Australian Dollar has weakened recently heading in the direction of 1.80 recently.

With the Bank of England due to meet tomorrow afternoon I think the central bank will keep interest rates on hold once again with a 7-2 split but with the UK showing some very positive Retail Sales earlier this month I think we could see some signs that an interest rate hike could be coming sooner than the markets expects and if this is the case we could see the Pound make some further gains vs the Australian Dollar towards the end of the week.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

RBA dovish on Monetary Policy Outlook (Daniel Johnson)

RBA Rate Hike appears to be less likely

The Pound has suffered against the majority of major currencies of late. GBP/AUD fell from 1.84 to 1.75 and there has been little reason for optimism fro Aussie buyers. The lack of clarity surrounding Brexit along with a host of poor data is holding back the pound considerably.

We did see GBP/AUD rise to as high as 1.79 during yesterday’s trading, but don’t be quick to think there will be further gains. This is more due to Australian Dollar weakness than any Sterling strength.

We have witnessed the Reserve Bank of Australia (RBA) deliver a rather negative speech. It was what was not said that casued a stir. The following line was removed from the minutes:

“Members agreed that it was more likely that the next move in the cash rate would be up, rather than down”.

I have stated previously I would be surprised to see a rate hike from the RBA and this certainly seems to reaffirm my thoughts.

The pound remains fragile due to Brexit, but the ongoing trade war between the US and China is a concern for the Australian economy due to Australia’s heavy reliance on China purchasing it’s raw materials. The US Dollar is also a far more attractive option for investors with the high levels of interest.

I am still of the opinion GBP/AUD will remain between 1.75-1.80 short term. Aim for the 1.79s if you are an Australian Dollar buyer and you have to move shortly.

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. It is important to be in touch with an experienced broker if you wish to maximise 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.

Will the Pound hit 1.80 this week against the Australian Dollar?

After having a very good run against the Pound the Australian Dollar has started to weaken in the direction of 1.80 on GBPAUD exchange rates. The confirmation from last night’s RBA minutes showed that interest rates are likely to be kept the same for the foreseeable future as they are helping to keep the economy performing well.

This has caused global investors to sell the Australian Dollar in favour of the US Dollar as the US Federal Reserve has already increased rates twice this year and this is the seventh time since December 2015.

Over the years the Australian Dollar has had a very strong positive yield but in recent times owing to the pace of rates going up in the US this has caused problems for the Australian Dollar.

However, not only is keeping interest rates on hold causing a problem for the Australian Dollar they are also facing the effects of Donald Trump’s latest threats of tariffs on Chinese goods.

As China is such a large trading partner with Australia then any negative news will often result in Australian Dollar weakness and this appears to be happening at the moment.

Trump has asked US officials to create a list of US$200bn worth of imports from China which could result in a very large trade war between the world’s two strongest economic powerhouses.

The Australian stock market has felt the effects of the news and the Pound vs the Australian Dollar hit the higher level of the 1.79 region earlier on during today’s trading session.

I personally think we could see the Australian Dollar weaken further this week and I would not be surprised to see the Pound hit 1.80 over the next few days.

On Thursday the Bank of England will hold their latest monetary policy meeting and recently the split has been 7-2 in favour of keeping rates on hold but with UK Retail Sales coming out much higher recently could this change one of the MPC member’s mind?

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

Tom Holian teh@currencies.co.uk

AUD Forecast – RBA Minutes Indicate Interest Rate Hike Unlikely (Matthew Vassallo)

The AUD has come under some pressure against Sterling of recent days, although on-going Brexit concerns are still handicapping any major advances for the Pound.

GBP/AUD rates moved close to 1.80 overnight and despite the AUD finding plenty of support around this level, it seems as though the Reserve Bank of Australia (RBA) minutes released overnight have had an impact on market sentiment.

The AUD had been performing solidly of late, with the Pound struggling to make any impact as negotiations over Brexit continue to move at a snail’s pace.

With the UK government split on its preferred strategy, the Pound has found little market support over recent weeks.

However last night’s RBA minutes, which give investors a key insight into the central banks current economic stance, seems to have dampened some of the recent positivity.

They suggested that the current record low interest rates in Australia were helping to support the economy, an indication that they were unlikely to hike the base rate in the short-term.

The most poignant piece of information however, referenced a concern that any further increase in value for the AUD would lead to a slower rise in inflation and economic growth. This meant that the central bank may well look to “jawbone” the AUD, which is when they will look to talk down the currency’s value, without introducing any official devaluation methods.

This in turn has caused investors to sell-off their AUD currency positions, which is probably why we have seen the AUD weaken this morning.

In the short-term concerns over Brexit will continue to shackle any spikes in value for Sterling, with the AUD likely to find an element of protection around the 1.80 threshold.

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.