Category Archives: AUD to GBP

RBA Interest Rate Forecast vital to AUD value (Daniel Johnson)

NAB predict Rate Hike as early as August

The National Australia Bank (NAB) has a very optimistic forecast in regards to rate hikes by the Reserve Bank of Australia (RBA). They are a minority. They are of the opinion we could see an interest rate hike by 0.25 basus points as early as August.

“The RBA has indicated that it is in no rush to raise rates in lock-step with global central bank counterparts. However, lower unemployment, and evidence of wages growth moving upwards — even gradually — should be enough to give the RBA confidence that inflation will eventually lift above the bottom of the band,” said Alan Oster, NAB Chief Economist.

“We continue to forecast two 25 basis point rate hikes in August and November, although acknowledge the risks are that these hikes could be delayed.”
Oster attached a couple of warnings which could change the RBA’s decision, noting that a slowing in household credit and house prices due to macro-prudential measures implemented by APRA “may help alleviate some concerns about household debt”.He continued “higher AUD may also threaten this outlook although our revised forecasts are for the currency to be 75 US cents by year end”.

Personally I do not share his view. I think a hike by August is very optimistic and economic data is not consistent enough to warrant a hike . Inflation is some way from where it needs to be and there is no reason to suggest there will be a rapid rise between now and August. This a viewpoint shared by the man that counts. RBA Governor, Philip Lowe who recently stated the following.

“further progress in reducing unemployment and having inflation return to the midpoint of the target range”, adding that it was “likely that the next move in interest rates in Australia will be up, not down”.

He also said “while we do expect steady progress, that progress is likely to be only gradual.

The general consensus is there will not be a rate hike until at least early 2019.

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 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

Will the Pound to Aussie Dollar rate recover back to pre-Brexit levels anytime soon? (Joseph Wright)

There has been a 1 and a half cent difference between the high and low for GBP/AUD today, as the pair appear to be continuing to decide which direction to move in next.

Sterling has performed in a mixed fashion against the majority of major currency pairs today and I think the economic data released this morning is perhaps one of the reasons for this.

This morning the office for national statistics (ONS) reported that annualised UK Inflation figures for January showed 3%, justifying the Bank of England’s concerns regarding the rising rates of inflation. This was above the expectation of 2.9% and and considerably above the BoE’s 2% inflationary target figure.

The potential for another rate hike from the BoE is now more realistic, and with wage growth now beginning to show signs of an improvement I think there is a chance of it happening this year which is why the pound has been climbing.

GBP/AUD is currently just under 1.80, and if the pair breach this key level I can imagine seeing the rate break through into the 1.80’s even if it’s proving a stubborn barrier up until this point. A move towards 2.00 would be back to pre-Brexit levels, and should AUD continue to weaken I think seeing GBP/AUD closer to this mark sometime throughout 2018 isn’t something to be ruled out.

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.

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.

 

BOE comments causes Sterling Spike (Daniel Johnson)

GBP/AUD – In Depth

Sterling has struggled against the Aussie following the decision to hold a referendum to leave the EU. GBP/AUD sat above 2.20 pre referendum and of late has been mired in the 1.70s. We have seen a recent spike for Sterling which can be atributed to several contributing factors.

Although there was a recent surge in retail sales figures from down under the spike for the Australain Dollar did not last long, as predicted it was an an anomamly that could be put down to Black Friday sales and the release of the iphone X.

Since then the Reserve Bank of Australia (RBA) have indicated that they will keep interest rates on hold for the considerable future the Aussie has lost value. This can be justified due to the infalted property prices in high wage growth areas. Foreign investors are willing  to pay these prices as investments but it is causing the locals to struggle spending the majority of their funds on neccesities rather than luxury goods. This does not bode well for the Aussie.

The recent surge to 1.79 was caused by hints from the Bank of England (BOE) there could be a rate hike as early as May 2018. The market moves on rumour as well as fact and investors bit.

It is important not to have too high expectations if you are an AUD buyer however, the uncertainty surrounding phase two of Brexit talks has the potential to hurt the pound. Davis and Barnier are far from being on the same hymn sheet.

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.

 

 

Where Next for the Australian Dollar – Stock Market Crash Impact (James Lovick)

The Australian dollar has seen a very volatile week with lots of events happening globally since Monday which have had a direct and considerable impact on the strength of the Aussie. The Australian dollar has come under pressure after $66 billion was wiped off Australian shares earlier in the week following a global sell off with considerable losses also seen in the US and UK stock markets.

The Australian dollar which is regarded as a commodity currency normally comes under pressure in times of global uncertainty and this happening again now. This new wave of uncertainty in the global economy could see further problems for the Australian dollar and the Aussie may have further to fall.

However the Reserve Bank of Australia may intervene before that happens and any signal from the central bank that it is keen to raise interest rates later this year could see the dollar bounce back. Clients looking to buy Australian dollars are seeing some excellent buying prices which have stemmed from the perceived extra global risk and there may be some more gains to be had in this rally. Any further shocks from the US are likely to result in further weakness for the Aussie.

GBP AUD

Rates for GBP AUD have seen a good week with levels for this pair now sitting at around 1.77. The Bank of England meet tomorrow to discuss interest rates and any change in policy could see movement for sterling exchange rates. The Bank of England Governor however is more likely to cause a market reaction on the back on any commentary on Brexit. The central bank is unlikely to make any changes to interest rates although any suggestion that there is likely to be a rate increase later this year should help support the pound.

Clients looking to buy or sell Australian dollars would be wise to get in touch to take advantage of any spikes in the market which si something we can help you with. Please feel free to get in touch with me at jll@currencies.co.uk

GBP/AUD remains at 1.77 after RBA opts to hold interest rates (Joseph Wright)

The Reserve Bank of Australia last night chose to keep interest rates unchanged, which was the expected outcome from economists leaving the currency markets unchanged at 1.5%.

This was the first chance the RBA had to make a change this year, and the base rate has remained at 1.5% for around a year and a half now. Many central banks have opted to hike interest rates in recent months, and should this continue it will result in the Australian interest rates being uncompetitive and therefore AUD weakness in my opinion.

Last year AUD benefited from offering one of the highest interest rates in the developed world. Investors are keen to hold funds in a high yielding currency but should AUD lose its competitive edge, it’s likely that money will be taken out of the Aussie Dollar and we’ll see it fall.

Politics also have the potential to move the GBP/AUD pair, especially at the moment as the European Union’s chief Brexit negotiator Michel Barnier is in London to discuss the UK’s plans and proposals for Brexit this week.

Those following the Pounds value should be aware of this and the potential it has to impact GBP exchange rates should any key comments be made, and do feel free to register your interest with me if you wish to be updated in the event of a major rate spike.

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.

Could we be headed for further AUD weakness? (Daniel Johnson)

RBA to keep interest rates on hold

Things do not bode well for the Australian Dollar at present. The Reserve Bank of Australia (RBA) have recently indicated that interest rates will be kept on hold for the foreseeable future. It was following Australian inflation data in the final quarter of 2017. There was a slight increase, but it did not meet the expectation of 2%. Some could deem this as positive, but the problem is due to the inconsistencies regionally.

Canberra, Melbourne and Sydney saw inflation hit over 2.1%, but if you look at Perth an area heavily involved in commodity exports inflation is struggling at 0.8%. This is definitely a cause for concern which is the reasoning behind keeping interest rates on hold.

The housing bubble created by those flocking to high wage growth areas is also a problem. The housing market remains strong in the east but is considerably down in the west according to the latest CPI figures.

With Australia highly dependent on raw material export to China it is important to keep an eye on Chinese data. We recently saw a fall in manufacturing data which has also caused Australian Dollar weakness.

GBP/AUD

GBP/AUD now sits above 1.75 which has been a resistance point of late. With the uncertainty surrounding Brexit talks if I was selling Sterling I would consider taking advantage of current levels. The last time we saw GBP/AUD near 1.80 there was a quick retraction possibly due to profit taking.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

GBP AUD Hits Resistance at 1.75 (James Lovick)

The Australian dollar remains set for an uncertain and volatile 2018 which will be heavily dependent on interest rate policy from the Reserve Bank of Australia (RBA) and also the US Federal Reserve. For the moment the Australian dollar has been boosted on the back of a weaker US dollar with political uncertainty and the recent government shutdown. The underlying question is how keen the RBA will be to raise interest rates this year. If the US Fed hikes 2-3 times this year as forecast then the RBA will need to carefully decide how it follows.

As things stand there is an expectation that the RBA will seek to raise interest rates in June 2018 but if the difference in rates between the US and Australia widens too much then the Australian dollar could come under some selling pressure. For the moment the future outlook on interest rates is less clear which is likely to result in considerable volatility for the Aussie as more direction from the RBA is offered. The RBA are likely to favour a weaker currency to help its export markets so the central bank may be keen to take a more relaxed view on events in the US and not rush to tighten policy. The Aussie could see a gradual weakening as the US raise interest rates in the Spring.

The US debt ceiling is expected to be reached sometime in March 2018. This is likely to be a political animal and finding agreement to extend could prove difficult. The Aussie could see material gains around this period and so clients looking to sell Australian dollars may wish to try and find an opportunity around this period.

Australian inflation data is released tomorrow and will be keenly observed by the RBA. A higher number could help see the pound rally.

GBP AUD

Clients looking to buy Australian dollars with pounds have seen a good window of opportunity in the last week although the pound is struggling to climb much higher having broken through 1.75 last week. The mood on Brexit appears to be slightly more optimistic but even now in the second round of negotiations which commenced on Monday there is still much ambiguity. Discussion currently surround the so called transitional arrangement which so far appear less thorny.

However there could be complications and disagreement when it comes to the terms of the future trade agreement between Britain and the EU. Any souring of mood could see a sharp fall in the price of sterling and I would expect to see a number of drops in sterling as a direct result of these negotiations in the coming months. Buyers should be a particularly careful as it wouldn’t take much to see a sudden drop in the price of sterling.

To discuss your requirement and how to maximise on the rates of exchange as they become available please feel free to get in touch with me James at jll@curencies.co.uk