Category Archives: AUD to GBP

Pound to Australian Dollar Forecast – Brexit Limbo does not bode well for the Pound

UK & Brussels at Impasse

Although investor concerns may have been eased following the Brexit extension the Pound still remains fragile and I would be surprised to see any significant gains against the Australian Dollar until we have firm news on Brexit. It seems as though the UK and Brussels are at a complete impasse, Theresa May has put several different alternatives to her deal to the House of Commons all of which have failed to gain a majority and Brussels have stone walled the UK stating it is the current deal or nothing.

European Council President, Donald Tusk sent out a warning to his “British friends” saying “please do not waste this time .” It seems as though another extension will be unlikely.

Brexit remains in Limbo and I would not be surprised to see us in a similar situation come October.

The Australian Dollar has its own problems however, Housing prices remain inflated in high wage growth areas such as Melbourne and Sydney. It mean Australians are being forced to spend their hard earned money on necessities rather than luxury goods and services.

Australia  has a heavy reliance on China purchasing its goods. The US/China trade war is causing a slowdown in Chinese growth which is having a knock on effect to the Australian economy and in turn the Australian Dollar. Iron ore is Australia’s primary export and fluctuations in its price can cause a change in Australian Dollar value, it is worth keeping an eye on if you have a trade involving the Aussie.

Recent news coming from US/China trade talks suggest an end could be in sight. US Treasury Secretary , Steven Mnuchin has stated we could see a conclusion to the trade war in under a month. If this is the case we could see substantial gains for the Aussie.

There are still however key points of contention. The US would like to keep existing tariffs in place in order to keep pressure on China , while Beijing would like them stopped immediately.

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 18yrs and FCA registered.
If you would like my help feel free to email me at dcj@currencies.co.uk.

Pound to Australian Dollar Forecast – Daniel Johnson

GBP/AUD – Brexit continues to dictate GBP/AUD and at present the situation remains in Limbo. Theresa May has now failed on three separate occasions with her deal and at present the default action if a deal is not reached by 12th April is the UK will leave the EU with no deal. Both sides are desperate to avoid this situation and it looks as though the outcome will be an extension.

How long the extension will be and with what stipulations is what is being hastily negotiated. May favours a short extension whereas Brussels would like a flexible year extension in place.

I believe an extension is already factored into current GBP/AUD levels as the market moves on rumour as well as fact. I would expect Sterling to gain value if an extension is confirmed as investor concerns are eased. Do not expect any great shakes however.

GBP/AUD has remained above the key resistance point of 1.80 despite the lack of progress in Brexit talks, I think this can be mainly attributed to the probability of a no deal remaining low with the vast majority of the House of Commons set against allowing a no deal scenario to occur.

I think Sterling will however remain fragile until we have firm news on Brexit, which now could be some way off. The Australian Dollar has it’s own concerns however. Housing prices in high wage growth areas continue to inflate and Australians are being forced to spend their money on necessities rather than luxury goods and services which is hurting the economy. The ongoing trade war between the US and China is also a key concern. Australia has a heavy reliance on China purchasing it’s exports, particularly iron ore. In fact iron ore value has been known to cause sways in the value of the Aussie.  The trade war is influencing Chinese growth which in turn has an impact on the Australian economy and the Australian Dollar.

Investors are choosing to shy away from riskier commodity based currencies in favour of what is considered to be safe haven currencies such as the Swiss Franc or the US Dollar.

I think if it were not for Brexit we could be seeing gains for Sterling against the Aussie, but at present you really need someone with an eye on the markets for you if you wish to take advantage of any spikes on the market, which recently have only been small windows of opportunity.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk .

AUD Forecast – RBA Keep Interest Rates on Hold at Record lows as GBP Finds Support Overnight (Matthew Vassallo)

GBP/AUD rates have spiked back above 1.84 overnight, as the Pound continued its recovery following last week’s losses.

Sterling was under considerable pressure following UK Prime Minister Theresa May’s failure, to once again get Parliamentary approval for her Brexit deal. This was the third time she has failed to gain the necessary support from MP’s and investors reacted to this by selling off their GBP positions, causing a sharp dip in value for the Pound.

This downturn inadvertently boosted the value of the AUD, which has had its own problems recently. The AUD saw its value increase by over four cents against the Pound, hitting 1.8290 at the high.

At this stage it seemed as though GBP/AUD exchange rates could be heading back towards 1.80, with the markets seemingly losing faith in the UK’s ability to find some common ground over Brexit, with MP’s unable to agree upon the best way forward in regards to a Brexit deal with the EU.

With further twists likely in this ongoing saga, those clients holding GBP may look at this week’s upturn as an opportunity, with the uncertainty over the UK’s final Brexit position likely to hamper any significant upturns for Sterling.

Looking at the Australian economy and the Reserve Bank of Australia (RBA) met last night and as anticipated kept interest rate son hold at the current record lows of 1.5%.

Like other commodity based currencies, the AUD has struggled to impose itself of late, with a slowdown in global trade causing investors to shy away from riskier assets such as the AUD. With the Chinese economy also showing signs of a longer-term slowdown, due for the most part to the on-going trade stand-off with the US, the outlook for the Australian economy remains dovish.

If you have an upcoming GBP or 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 nineteen 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 the Australian dollar weaken this week?

The Australian dollar exchange rate has been trending lower in 2019 on the increased expectation that we will in the future see the RBA, Reserve Bank of Australia cut their base interest rate. Numerous commentators have for now many months been commenting that we could soon see the RBA forced to take action against numerous global and domestic factors.

In Australia there has been a growing concern over Inflation levels which the RBA had targetted to see at 2-3% but has been averaging around 1.5%. To boost Inflation levels which are now at close to 10 year lows, the RBA might need to cut interest rates to help provide some stimulus to the economy.

Cutting interest rates by a central bank can do various things which can help an economy to grow. Firstly, it can make the currency cheaper to buy which can help the country to increase exports, thereby improving the economy. Secondly, it makes loans and borrowing less costly which can encourage business and consumers to spend more, thereby increasing economic activity.

The currency becomes less valuable from the cutting of interest rates in a similar fashion to the way a lower or higher rate of interest makes a particular savings account more or less attractive.

Interest rates are of importance on the Australian dollar and are a major factor in determining the relative strength or weakness of the currency. There is a growing expectation that we could in the future see the RBA cut rates which will see the currency weaker.

It is not just the domestic issues of a sluggish economy, it is also the ongoing uncertainty surrounding the more global problems and concerns which are relating to the economic outlook on global trade.

A key example is the ongoing Trade Wars and spat between China and also the US, this has seen global trade drop and with China being such a key partner to Australia, could continue to be a major factor.

With such global pressures on trade continuing, as evidenced by the United States Federal Reserve stating they will not be raising interest rates as soon as many thought earlier this year, the Australian dollar might continue to suffer from weakness, as it responds to continuing and ever-changing global shifts.

Pound to Australian Dollar: Brexit continues to Dictate GBP/AUD

The Brexit saga continues and now we are looking at an extension. GBP/AUD rates had recently risen to the highest levels since June 2016, breaching 1.88. This can be attributed to positive news surrounding Brexit, rumours were circulating that Brussel’s could make concessions on the Irish border and the chances of a no deal scenario dropped considerably.

PM Theresa May addressed the nation yesterday evening and made a plea to MPs to support her deal ahead of what is likely to be a third and final meaningful vote.

May also confirmed she had written to President of the European Commission, Donald Tusk to request an extension to Article 50. she has requested an extension until 30th June.

She also stated that she would not approve a long term extension to Article 50. This immediately raises the question whether this means she is prepared to step down as Prime minister should her deal be voted down and and then vote for a lengthy extension for talks.

She also said “this House will have to decide how to proceed”, if her deal is rejected for a third time.

If May were to resign you can expect this to hurt Sterling significantly.  GBP/AUD has now dropped into the 1.84s.

 US/China Trade War –  Due to Australia’s heavy reliance on China purchasing its goods and services and slow down in Chinese growth has a kick back on the Australian economy and in turn the Australian Dollar.

The US/China trade war is currently hurting the Australian Dollar and if it were not for Brexit I think Sterling could be making decent gains against the Aussie.

There were rumours the trade war could be resolved by the end of the month, but Trump yesterday threw a spanner in the works saying the following:

“We’re not talking about removing them, we’re talking about leaving them for a substantial period of time,”  “Because we have to make sure that if we do the deal with China that China lives by the deal because they’ve had a lot of problems living by certain deals.”

Brexit will continue to be the key driver on GBP/AUD. I think at this point we are looking at an extension as both parties do not wish to deal with a no deal scenario. I think if an extension is called there will not be any great shakes on the market. If Brussels do give concessions on the Irish border however, expect substantial Sterling strength.

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 18yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk.

AUD Forecast – Despite Brexit Uncertainty the AUD Remains Under Pressure (Matthew Vassallo)

The AUD has come under increasing pressure over recent weeks, with the Pound now trading around 1.87.

GBP has regained approximately 5 cents in the past few weeks, which is the equivalent of an additional 5000 AUD on 100k GBP/AUD currency exchange.

The Pound has made these inroads despite the on-going uncertainty surrounding Brexit. With the UK’s current exit deadline fast approaching, we still do not have any clarity on what the final outcome will be and this in itself you could argue, should be restricting any major improvement for GBP.

It seems as though the markets have spiked on the back of Parliaments decision last week, to move away from a no-deal Brexit outcome. However, unless UK Prime Minster Theresa May can convince MP’s to vote on her Brexit deal at the third time of asking, then an extension to Article 50 looks like the only remaining option.

How long any prospective extension might be is now what the markets will likely focus on and any further improvements for the Pound, will likely be impacted by this decision. With rumours of a two-year extension being floated, how will investors and the public react to such a scenario?

If an extension is granted without any indication of an agreement being virtually in place, then investor confidence could take a hit. It is likely to be followed my major public unrest, with people seemingly losing patience with the on-going saga.

Looking at the Australian economy and with concerns over falling house prices and a slowdown in global trade, investors seem to be shying away from the once popular AUD.

Add this to concerns that the Reserve Bank of Australia (RBA) will look to cut interest rates possibly twice this year and it is easier to understand why the Pound has made inroads against the AUD of late, despite investors remaining cautious about the Pound and its future prospects.

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 nineteen 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 the Australian dollar weaken this week? RBA Meeting Minutes are key

Tomorrow is the latest RBA, Reserve Bank of Australia meeting minutes. Investors are closely monitoring this for any news that we could well see key changes in the outlook for the Australian dollar, as the RBA responds to the change in economic outlook for both the global economy and the domestic Australian economy.

Pressures are mounting on the RBA to be more conscious of a consideration for a more dovish, or soft interest rate policy as investors seek to gauge the likelihood that up ahead interest rate cuts will become much more necessary for the Australian economy. China is Australia’s largest trading partner and the market is of the belief continued economic troubles will see the Australian economy suffer, and therefore need to cut rates ahead.

The raising and lowering of interest rates is a big factor in the currency markets, as investors seek to position themselves in a currency which they believe will ‘yield’ a higher return. For example, the higher an interest rate, the stronger generally a currency will be. It is similar to the way that a higher interest rate will attract investment into a savings account.

Likewise, when an interest rate is cut, or investors believe that it might be up ahead, the currency will lose value. This is because it makes the currency less attractive to hold by those concerned with a stronger investment. Such is the case with the Australian dollar at present, as a lower interest rate prediction makes the currency less attractive to hold by investors.

Moving forward, the RBA and Australian economic data will face tough scrutiny as the market gauges the likelihood of the future cuts in the rate. Clients with a position to buy or sell Australian dollars might benefit from a quick review with our team to ensure they are fully up to date with what lies ahead, and how they might benefit from the volatility.

Thank you for reading and please get in touch if there is anything that you wish for us to run through or discuss, relating to a transfer of Australian dollars.

Jonathan Watson

jmw@currencies.co.uk

GBP/AUD – Where Next? (Daniel Johnson)

Brexit Extension

Since December the Pound has been losing value against the Australian Dollar. Sterling reached its highest level against the Aussie yesterday since the 2016 referendum. This was following the news that a Brexit no deal had been taken off the table until 29th March combined with the news that MPs have now voted to extend Article 50 in order to come up with a mutually acceptable deal between the UK and the EU.

The Australian economy is currently experiencing problems which is proving to be another catalyst for the rise in GBP/AUD. Consumer confidence, business confidence and housing loans data all showed a decline. Australia’s heavy reliance on China purchasing it’s goods and services is hurting the Aussie as Chinese growth, although still impressive has slowed quite considerably since the US/China trade war commenced. It was announced yesterday that China’s industrial output fell to its lowest level in 17 years during the first two months of 2019, unemployment has also been on the rise. There is the potential that Chinese President, Xi JinPing and US President, Donald Trump could come to an agreement at the end of the month and cease tariffs which could boost investor confidence and in turn strengthen AUD.

Will the RBA minutes give an insight into future Monetary Policy?

Although Brexit will continue to be the key driver on GBP/AUD there are plenty of other factors that can have an impact on the currency pair. On Tuesday morning, during the early hours the Reserve Bank of Australia (RBA) will release minutes following the recent interest rate decision where rates were kept on hold at 1.5%. The RBA have already hinted at potential rate cuts and if this is mentioned again we can expect further Australian Dollar weakness.

Next Thursday has the potential to cause market movement with the release of RBA Bulletin and unemployment figures for February. If the data arrives away from expectation expect volatility.

Personally, I think the Aussie could be in for a tough time due to the increasing problems surrounding the economy, I haven’t even touch on the housing price bubble. If it is announced there is a deal on the Irish Border I would expect significant Sterling strength. I feel Pound is currently chronically undervalued. If I was sitting on Aussies I would not be hanging around for improvements considering risk versus reward.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk .

 

 

 

 

 

Could the Australian dollar weaken further?

The Australian dollar has been weaker in the latest few weeks as investors fears over the Trade Wars remain, plus the expectations on the RBA, Reserve Bank of Australia, increase to potentially cut the interest rate in the future. There has been a growing expectation that perhaps the Australian central bank has been under estimating the extent to which they would need to cut interest rates in the future, based on the ever-changing global developments. If you are looking to buy or sell Australian dollars in the coming days and weeks an awareness of all of these options and outcomes is sensible.

The market is looking like it could be in for a rollercoaster ahead for the Australian dollar as a series of events develop overseas and at home to trigger volatility. One of the key aspects of the Trade Wars is that in disrupting global trade, they are putting pressure on the global economy which will ultimately lead to a weaker Australian currency. Australia’s economy is heavily reliant on the global economy performing well which will support strong demand for the export of their raw materials.

Overall, there is a belief that the Australian dollar is destined to lose value over the longer term, this is evidenced by its recent weakness which will only continue should the market continue to be faced with the evidence of a slowing global economy.

There is important economic news ahead for the Australian dollar with key information released this week on Consumer Inflation Expectations and National Australia Bank Business confidence figures. This will all be seen in the light of the ongoing developments with the US and China trade wars which had been more positive, but just lately have seen uncertainties creep back.

If you have an important currency transfer to make, being prepared is key in this market where events can quickly and suddenly change and unfold. If you would like to run through or discuss the market or our services, then please do not hesitate to get in touch to discuss further.

Thank you for reading and please contact me Jonathan on jmw@currencies.co.uk.

GBP to AUD Rates before Brexit Votes in Parliament this Week (James Lovick)

The pound to Australian dollar has been performing well in recent weeks with rates testing the 1.85 levels for the GBP to AUD pair. However the pound has weakened as concerns over Brexit continue to dictate the direction of travel. There is currently a deadlock in the ongoing Brexit negotiations with a breakdown in talks with no compromises being made over the contentious Irish backstop. The UK attorney general Geoffrey Cox and Brexit Secretary Stephen Barclay have been unable to find common ground over the weekend ahead of a meaningful vote to be held in parliament on Tuesday.

With no changes to the backstop it seems almost certain that the Prime Minister will be unable to get through parliament the current withdrawal agreement. It leaves the pound on shaky ground with so much riding on the outcome of Tuesday’s vote. If the vote does not pass then a further two votes are to be held on Wednesday or Thursday and these will determine if there is to be a no deal Brexit or if there is a majority in parliament to delay Article 50. This week represents one of the biggest weeks in British political history and there is likely to be substantial market volatility for GBP vs AUD depending on the outcomes of these events.

Home loan data down under should make for an interesting start to the week with concerns still hanging over the Australian property market. Property prices have been falling in the major cities as a result of global economy concerns as well as domestic rules on lending standards. Australian home loans took a nose dive last month with a drop of -6.1% highlighting a significant drop in the market.

The consensus is for a climb to 1% which could help reassure the market and may help boost the Australian dollar. With the full effect of the trade war yet to be felt then the housing market in Australia may have further to fall which could paint a bleaker outlook down under.

Those looking to buy or sell Australian dollars would be wise to plan around this week’s major political events in the UK. For more information on how to tackle the exchange then please feel free to contact me James at jll@currencies.co.uk