Monthly Archives: October 2019

What Brexit means for the AUD to GBP forecast

In a time of seemingly endless uncertainty, the outcome of Brexit is one that will not only affect the UK but also every country linked with it. The Pound to Australian dollar outlook is likely to be affected massively by the direction Brexit takes.

Individuals looking to buy or sell AUD should be keeping a close eye on what comes out of Westminster surrounding the events of Brexit in the very near future.

Brexit uncertainties leave buyers and sellers hanging

With Boris Johnson unable to deliver on ensuring Brexit takes place on the 31st of October, another extension has been put in place giving the UK government up to 31st January to deliver on 2016’s referendum.

Add to this the fact that the UK Prime Minister has called a General Election for December, and subsequent votes in parliament have landed on a date of the 12th and the UK political landscape doesn’t look any more certain than it has for the past few years.
The uncertainty surrounding Brexit and the future of UK politics as a whole has experts suggesting that volatility is likely to be expected between the pound and Australian dollar respectively.

Talks surrounding Brexit have had both positive and negative influences on the Australian dollar, with positive talks between Boris Johnson and Leo Varadkar just a few weeks ago lifting the GBP/AUD rate.
However, as the Brexit momentum begins to slow, the highs experienced with the pound to Australian dollar exchange have eased off a little as the next steps in Brexit become less clear.

Risks of Brexit and the outlook for the GBP

The recent extension means the likelihood of a no deal Brexit is now reduced significantly, which is why the Labour Party Leader Jeremy Corbyn agreed to support the motion for another general election in December. This was good news for the pound, which, should a no deal Brexit be officially stopped, is likely to strengthen significantly. If a no deal Brexit does become a reality however then it is likely to help those looking to sell AUD to buy GBP.

Global trade wars and knock-on effects from Brexit may affect the rate of AUD

With countries like China reporting a plateau in their economic growth, the lowest forecasts in around 30 years, there is concern that a similar effect may be felt in countries around the world.

The Reserve Bank of Australia (RBA) may look to cut interest rates in a bid to keep up in the Trade Wars, but in doing so, these lower interest rates will more than likely equate to making the AUD weaker.
Investors on the Australian side are warned that they may need to contend with Trade Wars and the varying Australian interest rates at this time.

The outcome of Brexit is likely to affect the relationship of AUD/GBP. Volatility is likely to be expected in a time where the direction of Brexit is unclear. Buyers and sellers alike are advised to keep an eye on the news from Westminster as it unfolds.

For more Pound and AUD news or if you have a currency requirement you can get in touch with me, James Lovick, directly at jll@currencies.co.uk, or call +44 (0) 1494 360 899 to discuss these factors in more detail.

Will the Uluru closure effect the Australian currency outlook?

One of Australia’s biggest tourist attractions has recently held their very last visit from the public. The closure of the Uluru (or Ayer’s rock) has surprised many but has been coming for some time now, with it being a very sacred place for the indigenous people.

With such a huge draw for tourists now being off limits, there is a chance that the AUD currency outlook could be affected as Australian tourism loses one of its biggest draws and most historic attraction.

Possible effects from the closure

Sure, this isn’t the only reason tourists visit Australia but closing off Uluru to tourists means that the footfall is going to take a substantial hit.

With 9.2 million tourists visiting the country in 2018, a percentage of these may have been swayed to visit Australia over another destination by The Uluru.

Hotels in the area have reported around 80% capacity in recent years and have enjoyed this influx mainly due to a low Australian dollar as well as a raise in retiring overseas individuals.

Tourism is one of the key drivers of the economy in Australia. Should there be a slight decrease in tourism from this closure there is a chance that sales, profits, jobs and income could be hit with a knock-on effect, particularly for the surrounding area of the attraction.

Local businesses in the area will be the most impacted by the closure with some of the tour groups giving back to the local community through re-building schemes.

The closures effect on the AUD currency outlook

The AUD to GBP forecast is likely to be unaffected with the closure, as mentioned the slight drop in tourists visiting to climb the rock will be unlikely to cause a complete shift which may skew the relationship of the two currencies.

Overall, the closure is likely to have little effect in the long run, but there could well be a dip in the AUD’s strength before levelling out again thanks to recent gains.

Tourism in Uluru area may be lowered but for Australia as a whole, their currency outlook is dictated by a lot more tourist attractions that are unlikely to close any time soon. Think; Climate, beaches and people. This should help the Australian currency outlook navigate this brief dip in value.

Not only this, but plenty of tourists will still want to stop by for a scenic photograph at the foot of Uluru to tick off their Oceanic bucket list. These tourists are likely to visit the existing local businesses which may still have reason to operate with the steady influx of visitors that merely visited to see the wonder of Uluru with their own eyes.

Overall, the outlook is still good for the AUD. For more Pound and AUD news, keep up to date with our daily blogs here alternatively if you have a currency requirement you can get in touch on +44(0)1494 360 899 to discuss these factors in more detail. Thank you for reading and I look forward to hearing from you soon, Jonathan Watson – jmw@currencies.co.uk

Refreshed Brexit negotiations and economic uncertainty in China

The UK is facing some potentially history-shaping events at present. Uncertainty is rising and unrest is creeping in amongst politicians and the public alike which is reflected in the ups and downs of the pound’s strength against the Australian dollar.

So what’s impacting the GBP/AUD interbank exchange rates?

The uncertainty of Britain’s future within the European Union has played a huge part in the pound’s strength against the Australian dollar for well over 3 years now, but recent events have caused even greater fluctuations than what can usually be expected.

The pound was up again after Prime Minister Boris Johnson announced that Europe had accepted his Brexit deal. But now after asking for an extension past the October 31st deadline, we are seeing more sheepish approaches to backing Sterling once more – despite holding on to the majority of its recent gains.

Increased general election talks

Much in the same vein as Brexit, general election talks being spurred on by Jeremy Corbyn are creating more instability in the house of commons – something which has seen the AUD strengthen against the pound.

The more likely a no deal Brexit and general election become, the stronger the AUD becomes against the pound, so this is certainly something you’ll want to be monitoring over the coming months.

China’s economic uncertainty

Since the Australian dollar relies so heavily upon exports to China, it is at the mercy of any uncertainty of its economy.

With the US and China locked firmly in a trade war, the Asian’s economic climate has suffered greatly, having an unfortunate knock on effect on the strength of the AUD against the Pound.

This can all be reversed if the trade war is brought to an end, but with that not looking likely to happen any time soon, the AUD is likely to continue to suffer.

Keep an eye on relations between the US and China, especially if you have a vested interest in the Australian Dollar.

For more pound and AUD news, keep up to date with our daily blogs here, alternatively you can sign up with us here.

GBP/AUD drops from its annual highs as Brexit momentum slows

The Pound has eased off from the highs we saw earlier this month as the next steps for Brexit have become less clear.

Sterling has risen dramatically this month as UK Prime Minister Boris Johnson has agreed a new deal with the EU that so far has been received well, although his hopes of pushing the deal through before the end of the month as he had hoped are fading.

When will the UK have a general election?

Parliament has voted in favour of agreeing a new timeline for the UK’s departure rather than rushing to implement the deal, and now we’re awaiting an update from the EU as to whether or not they will agree another Brexit extension and also for how long. The general consensus is for an extension up until the 31st of January and the chances of a general election have also increased now which is something Boris Johnson is pushing for, whereas Labour leader Jeremy Corbyn has been less willing to agree to.

At the time of writing the GBP/AUD pair are trading in the 1.88’s and the highest point of the year came earlier this month when they hit 1.9093. The gains for the Pound due to the decreased chances of a no-deal along with the new Brexit Withdrawal Bill have been aided by the falling Aussie Dollar, with the Reserve Bank of Australia opting to cut Australian interest rates to their lowest levels in history.

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.

Pound to Australian Dollar uutlook after Varadkar & Johnson Talks cause Sterling strength

Positive Brexit talks lifts GBP/AUD

Following positive news in Brexit proceedings we have seen gains for Sterling against the Australian Dollar. Boris Johnson spoke with Leo Varadkar for over two hours yesterday and were reported to be detailed and constructive. Varadkar said that the talks were very positive and negotiations could resume.

This is good news ahead of the EU summit on 17th and 18th October. Boris must have an acceptable deal in place by the 19th October in order to avoid either an extension or a no deal scenario. We saw Sterling make advances against the majority of major currencies following the news although whether these advance are justified can be argued.

US China trade war continues to effect AUD

With such little time to find a solution to the Irish border the Pound could remain fragile. The Australian economy is still under threat due to the prolonged trade war between the US and China due to Australia’s heavy reliance on China purchasing it’s exports. Brexit seems to be outweighing these concerns at this point and is one of the key factors affecting GBP/AUD.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.