Category Archives: AUD to GBP

Mixed messages on Trade Wars mystify AUD Exchange rates

The Australian dollar has been pulled from pillar to post as conflicting reports on the Trade Wars between China and the United States send mixed signals to the currency markets.  A report from the Wall Street Journal newspaper indicated the US might be ready to temper down some of the tariffs and their tone in the talks, to try to seek a resolution. This report was then quickly dismissed by the US Treasury Department, leading to the Australian losing value.

The Trade Wars are a major driver on the currency as investors seek to gauge the likelihood of Australia suffering any economic slowdown as a result of the expected slowdown in China. China is predicted to come off the worst from any developing tensions and a closely monitored Chinese Manufacturing survey earlier in the year indicated a slowdown. This saw the Australian dollar weaker and has set the tone for 2019 for currency so far.

We have expected a more negative twist and turn of events on the Trade Wars, Donald Trump is not the kind of person to easily step back from confrontation even where it causes harm. This attitude has seen the US Government enter its longest ever shutdown which has weighed heavily on sentiment and could put further pressure on the global economy.

Of benefit to the Australian dollar could be any quick turn resolution in sentiments but it does seem likely the Trade Wars will continue. Donald Trump’s actions will continue to be under scrutiny and he is unlikely to easily and quickly back down from the rhetoric that has driven the Australian currency lower.

Worsening economic data for the Chinese economy will only heap pressure on the Australian currency as investors have to weigh up the longer term prospects for economy in such uncertain global conditions. Whilst any surprise twists in sentiment could see pockets of Australian dollar strength it does feel that the general trajectory will be negative and the risks are to the downside with the currency.

Thank you for reading and I welcome any comments or business inquiries with regard to personal assistance with the timing and planning of any international currency transfers.

Thank you for reading and please contact me directly on jmw@currencies.co.uk to discuss further.

Pound to Australian Dollar Rates Move Higher Towards 1.80 (James Lovick)

The pound to Australian dollar exchange rate has moved higher towards 1.80 for the GBP AUD pair having found support after the historical vote in the House of Commons on Tuesday this week. UK Prime Minister Theresa May was able to win the vote of no confidence in the government which took place last night having been put forward by Labour leader Jeremy Corbyn. The Brexit negotiations continue to be the main driver for GBP to AUD and the markets now await a statement from the British prime Minister on Monday having lost her vote by a staggering 230 votes.

The pound has found some support as it is becoming increasingly clear that there is not a majority in the house of Commons for a no deal Brexit, even though the default option in the event of a no deal is enshrined in law. The markets at least appear to be feel more relaxed that a no deal is not a likely outcome anymore and this is helping to support the price of sterling. Clients looking to buy or sell Australian dollars are likely to see a hugely volatile period in these coming weeks ahead of the UK’s withdrawal from the EU 29th March 2019.

UK retail sales date are released tomorrow where a small drop is expected although the headline figure should nonetheless look healthy taking into account spending on the high street over the festive period. Next week sees important unemployment data which also includes the wage growth numbers, something the Bank of England monitors very closely to determine its monetary policy.

The Australian dollar meanwhile is also struggling as continuing concerns over global growth hamper AUD to GBP. With a serious trade war still yet unresolved between the US and China and evidence of a downturn in the global economy the Australian dollar could be set for some tough times ahead. There are talks of China looking to stimulate their economy through injections of cash and also tax cuts which could help see a boost of the Australian dollar although these measures may take some time to have any effect.

For more information on the Australian dollar and how to make the most of any opportunities when transferring funds then please feel free to contact me James at jll@currencies.co.uk

Sterling climbs as May’s Brexit deal is emphatically rejected

It’s been a volatile 24-hours for the GBP/AUD exchange rate, as the Brexit talks ramp up and the UK parliament decides how best in carry out the Brexit.

Late yesterday evening the UK Prime Minister, Theresa May’s Brexit deal was overwhelmingly voted against by Parliament. The amount of votes she lost by was in the top-end of expectations, as she lost by 230 votes with was a much larger number than many analysts had expected.

Since then, the leader of the opposition (Jeremy Corbyn of Labour) has called a ‘vote of no-confidence’ in the government which will take place this evening. May is expected to win as no members of her own government have announced that they will vote against her and the DUP Party of Northern Ireland has also offered their support.

Tonight’s vote at 7pm is the next step in the Brexit process that could impact the Pound’s value, but what happens next is now quite unclear. The existing government has 3-days to announce their plan-b which could also be a market mover, so if you wish to be updated in the event of a major market movement do feel free to register your interest.

The Aussie Dollar, like the stock markets in the region remain under pressure whilst we wait for more clarity on global growth and trade war concerns between China and the US. The GBP has regained a lot of ground against AUD recently and last nights vote has helped. The pair are currently trading in the 1.79’s so it will be interesting to see whether the pair will manage to break through the psychological 1.80 level.

Moving forward I expect to see the pair continue to be driven by Brexit related updates, although early tomorrow morning there will be a number of releases from Australia concerning new home sales and inflation data.

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 debate to influence GBPAUD exchange rates

Today debating begins in the House of Commons and I expect this will be the key driver for GBPAUD exchange rates for the remainder of the week. Most media outlets are suggesting that Theresa May has failed to gain further concessions from the EU, therefore the next 3 days could be tricky for the Prime Minister and consequently the pound could suffer.

Going into next week, Conservative MPs are going to have to ask themselves whether voting in favor of Theresa May’s ‘good deal’ is better than voting against her and consequently entering a complete unknown. It’s likely if MPs vote against her, the Prime Minister will take the trip back to Brussels to try to renegotiate. However the problem I have with that is she has lost all of her bargaining chips now that MPs are pushing her to confirm that a no deal Brexit is completely off the table. If the UK are not prepared to leave the EU with a no deal Brexit why are the Europeans going to give further concessions?

Other alternatives would be for Labour to file a motion of confidence against the government which could force a general election, Theresa May to resign, a peoples vote or a no deal Brexit. Most of the alternatives I expect will cause more pain for clients that are buying Australian dollars.

Prime Ministers questions start at midday and the debate will follow. To be kept up to to date as developments unfold feel free to outline your requirements.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your requirements. 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.

Brexit continues to be the main influence on GBP/AUD (Daniel Johnson)

Could Brexit January 15th vote simply lead to another?

GBP/AUD rates continue to be largely dictated by Brexit. Theresa May has now confirmed 15th January as the date that parliament will vote on her current deal. The vote was originally delayed due to May’s lack of confidence in the deal going through. European Commission President, Jean-Claude Junker has said there will be no changes to the current deal and he is only willing to clarify the current terms. Could it be the case that Junker will make concessions? Or could the threat of a no deal Brexit force a vote through?

May has suggested if the deal does not go through at her first attempt then there will be a second vote, this could point to out that she feels Brussels will change it’s stance. There is still a huge lack of clarity surrounding Brexit which is not sitting well with investors. The majority of scenarios are Pound negative, but if May were to be ousted or resign we could see a second referendum back on the table.

If May’s deal does not go through we  could see a leadership challenge from Corbyn or indeed we could see her resign if it looks like the deal will have no chance of going through, although  I don’t take her for a quitter. I am not a particular fan of May, but you cannot help but admire her perseverance.

If you look historically if a country loses it’s leader the currency in question would weaken, however in this situation it will be interesting to see how the market reacts. We could see an initial fall due to political uncertainty, but if it appears a second referendum comes to the forefront it is widely predicted that the vote would come in in favour of remaining in the EU according to polls. This could boost investor confidence and in turn the pound.

Would I be hanging on for this if I was selling Sterling?

The answer is no. The majority of Brexit outcomes  result in Sterling weakness, if you have to move short to medium term I would be looking to take advantage of current levels or at least a tranche for safety. The ongoing trade war between the US and China is a concern for the Aussie and if it were not for Brexit I think Sterling would be experiencing gains against AUD, unfortunately the lack of clarity surrounding Brexit is outweighing the trade war.

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 16yrs, 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 . (Daniel Johnson) Thank you for reading.

 

 

Is now the time to buy Australian dollars with pounds?

Over the last month the pound has continued to struggle along against most major currencies due to the pressures of Brexit, however the pound has made gains against the Australian dollar as the Australian dollar has been weakening more than the pound.

The ongoing trade war between the US and China is a key concern for investors within Australia as China is Australia key trading partner. Furthermore the ongoing problem with the housing market is also a concern. Interest rates are set to remain on hold for the time being, and we await further information from the Royal Commission in regards to lending standards. If it’s the case that Australian banks are set to tighten lending standards further, I expect house prices in the major cities will decline further putt further pressure on the Australian dollar.

However for clients that are converting GBPAUD for the time being all eyes should be glued to the Brexit negotiations. MP’s return to work on the 7th January and their first job is to debate Theresa May’s Brexit plan and then the week after to have a meaningful vote. Last month the Prime Minister cancelled the debate and the meaningful vote as she knew she was going to lose, and unfortunately for the PM I expect this will be exactly the same this month.

The PM canceled the vote as she wanted further reassurances from the EU and to date it doesn’t look like this has happened. The EU have made it clear there will be no more negotiating and the deal on the table is the final deal. Therefore I expect MPs to vote down the deal and one of a few scenarios could occur. I believe we will either see a motion of confidence against the government or Theresa May will try to go back to Brussels and renegotiate. Either way I expect this to be a tough month for the pound against the Australian dollar.

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.

Dayle Littlejohn

US-China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Pound Value hinges on Brexit Deal

Brexit is anchoring the Pound against the majority of major currencies due to the lack of clarity surrounding Brexit. The current situation is not a good one, May’s deal in it’s current form seems to have little chance of being passed by parliament. The lack of faith in the deal going  through was the reason the vote has now been delayed. Parliament reconvenes on 7th January and the vote will be held on the week commencing 14th January.

The 21st January is the final date the government can release it’s withdrawal plans. The majority of the possible outcomes I would largely consider Sterling negative. Jean-Claude Junker, President of the European Commission has stated that the deal on the table will not be renegotiated and that Brussels are only prepared to clarify the current terms of the deal. In it’s current form the deal does not look like it will go through which would hurt Sterling.

If the deal does not go through it is likely May will face  a leadership challenge from Corbyn or May could resign,  if this was to be the case the further political uncertainty would hurt the Pound. If May is ousted a General Election will be on the cards which does not bode well, but does bring a second referendum back to the table. If a second referendum is announced this could be deemed as pound positive as polls suggest the UK public would now vote to remain in the EU.

A no deal scenario would be the most damaging for the Pound although I am not of the opinion the losses will be as severe as the Bank of England have been touting. Carney suggested there will be over a 25% fall in house prices and GBP/EUR could drop below parity.

US-China Trade War could be prolonged

The US-China trade war continues to weigh on investors mind and many have moved away from the Australian Dollar due to Australia’s heavy reliance on the Chinese purchasing it’s goods and services. The current 90 day truce is in place provided China come to the table to negotiate over their current economic model. I am doubtful any major concessions will be made and the trade war could be prolonged which will hurt AUD. We could see an escalation if sufficient concessions are not made with the US threatening to increase tariffs on Chinese goods by 25%. This would hit both economies hard and also would cause further global economic uncertainty. If it were not for Brexit I think we would be seeing gains for Sterling against the Aussie, but at present the lack of clarity surrounding Britain’s future is holding the pound back.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving.

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

Will the Australian dollar weaken in 2019?

The Australian dollar is likely to weaken in 2019 as the concerns over Trade Wars intensify amongst investors. There is a growing concern that in the future the market will be more uncertain and the Australian dollar, as a commodity currency is likely to be weaker in the future. Clients with a position buying or selling the Australian currency should be strapping themselves in for a volatile period as the market tries to second guess what lies ahead.

In nearly every forecast for the year ahead I have read, the AUD is noted to come off worse from a worsening Trade Wars situation under Donald Trump, showing no signs of backing down and seeking to challenge China’s economic plans. Clients with a position buying or selling the Australian dollar will have a tough time in the future to try and second guess the market but as the Aussie dollar reflects global attitudes on trade, the likelihood is that the currency will weaken.

Clients who need to make an exchange should note not just the changing global attitudes on trade but also the negative political and economic effects at home in Australian too. Whilst the market had been pricing in for an interest rate hike in the future, some are now suggesting that the RBA, Reserve Bank of Australian will in fact be forced to look at an interest rate cut instead. This could send the AUD into a downward spiral as investors look for more comfortable and stable stores of value.

2019 is shaping up to be a more uncertain time on the currency markets as investors struggle to make sense of the changing global economy that lies ahead. Investors will struggle to find the Australian dollar an attractive currency to hold, particularly when the US dollar is now offering a higher return with a higher rates of interest on offer.

If you have a transfer to make and wish to consider the latest news and trends which will move the market, please do not hesitate to get in touch to discuss further.

Jonathan Watson

jmw@currencies.co.uk

US-China Trade War does not bode well for AUD (Daniel Johnson)

Prolonged Trade War could hit the Australian Dollar

Sterling remains fragile against the majority of major currencies due to the lack of clarity surrounding Brexit, I feel GBP/AUD would be even lower than current levels if it were not for the US-China trade war.

Australia is heavily reliant on China purchasing it’s goods and services and the trade war is causing a slow down in economic growth. China has being going tit for tat on tariffs with the US and despite the current pause the situation has the potential to escalate.

The onus is on China to get the trade war sorted as quickly as possible. The trade war is a threat to China’s already slowing economy, growth missed economist’s forecasts by 0.1% in the 3rd quarter landing at 6.5%. This is the weakest quarterly growth since 2008.

There is a disproportionate effect on China when compared to the US. China’s exports to the US amounts to a bigger section of the Chinese economy than the amount to which China-bound US exports represent to the US economy. In 2017 China exported USD 50bln of goods to the States form  a USD 12trn total. This is compared to the US who exported USD 130bln worth of goods to China from USD 19trln GDP.

At present there is a 90 day pause on tariffs which commenced at the beginning of December. The US has agreed to hold back on a 25% increase on Chinese products if China agree to negotiate making fundamental changes to it’s current economic model. A 25% increase is extremely high and would no doubt have a severe impact on both economies.

This does not bode well for the Aussie. If it were not for the debacle that is Brexit I think we would be witnessing the Pound strengthen against the Australian Dollar. Brussels have stated they are not willing to make any changes to May’s deal and it glaringly obvious it will not get voted through parliament in it’s current form. We could be looking at a leadership challenge for Corbyn or a no deal scenario which would both hurt Sterling even more. I feel a second referendum could boost Sterling as polls suggest voters would now wish to remain in the EU, I think May would have to go for this scenario to emerge.

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 help feel free to email me at dcj@currencies.co.uk.
Thank you for reading.

GBP to AUD Rates Rally after Weaker Australian Unemployment Data (James Lovick)

Pound to Australian dollar exchange rates have rallied higher this week with rates for the GBP AUD pair breaking over 1.78 and creating a good short term window of opportunity for those looking to buy Australian dollars. Australian unemployment data released yesterday arrived weaker than expected with a small rise in the headline number.

Unemployment down under now sits at 5.1% which is slightly worse than the 5% that was expected, something that will be picked up on by the Reserve Bank of Australia. The central bank has hinted that interest rates may need to rise in 2019 although the economic data will very much dictate whether or not this happens. Any signs of a slowdown will almost certainly put the Reserve Bank of Australia on the defensive which could result in Australian dollar weakness.

GBP vs AUD on the whole is on a weaker footing as result of the ongoing Brexit uncertainty in the UK. However the deadline of 29th March 2019 is fast approaching and a parliamentary vote to be held 14th January 2019 will dictate the direction of travel for the pound. If Theresa May finds herself able to get this deal through parliament then the pound could see some major gains. The reality at the moment is that this is highly unlikely and an uncertain period could like ahead. With no concessions being offered by the EU the deal is likely to be voted down over concerns for the Irish backstop which currently is not time limited.

The other big factor for GBP vs AUD is what happens between the US and China with regards future trade. Tensions are fraught at the moment with allegations of corporate espionage in the technology sector. Although further tariffs on Chinese goods have been paused there is every chance that all of China’s goods could face US trade tariffs, something that will be of concern for the Australian dollar. Any slowdown in global growth could see problems for the Australian economy which may be adversely affected.

For more information on dollar exchange rates and assistance in making transfers either buying or selling Australian dollars then please feel free to contact me James at jll@currencies.co.uk