Category Archives: AUD to GBP

AUD Forecast – Australian Economic Output Continues to Heap Pressure on the AUD (Matthew Vassallo)

The AUD has been under growing pressure of late, with the Pound finding plenty of support above 1.85.

Australia’s economy remains stagnated, with concerns over global trade and uninspiring growth figures, handicapping any sustainable advances for the AUD.

This period of relative economic downturn is causing investors to shy away from the AUD, which like all commodity-based currencies is struggling to maintain its levels, due to investors risk appetite being minimal.

Yesterday’s Gross Domestic Product (GDP) figures, along with last night’s Retail Sales figures are likely to reinforce this negative undertone, although the silver lining for those clients holding AUD is that the poor figures have not yet caused the AUD to slip further against GBP.  GDP figures showed a drop to 0.2% month on month and whilst Retail Sales data showed an improvement from last month’s reading of -0.4%, they still came out under the markets expected result at 0.1%.

It is no real surprise then that the Reserve Bank of Australia continue to hold interest rates at their record lows of 1.5%. This is also causing the AUD to be less attractive to investors, who in years gone by would have looked at Australia’s previously high interest rates as an opportunity for a high yielding return on their funds.

Whilst the current climate is hardly like to inspire longer-term confidence in the Australian economy, things could be set to get wore before they get better.

One of Australia’s largest banks Westpac recently release their economic forecast for the rest of the year, in which they predicted the RBA would cut interest rates again, possibly twice by November. If this scenario comes to fruition, interest rate should fall to new record lows of 1%. This in turn will likely have negative ramifications for the AUD.

Whilst the UK continues to try and find some common ground with the EU in regards to the Irish backstop arrangement, as of yet, no breakthrough has been made. With the second “meaningful vote” fast approaching, UK Prime Minister Theresa May is running out of time to push through the amendments she will need, in order to convince parliament to vote in favour of her Brexit deal.

The markets focus will remain firmly on the UK ahead the current Brexit deadline of March 29th but any breakthrough in talks with the EU and a positive outcome to next week’s vote, is likely to drive investor confidence in the Pound and a move up to and even through 1.90 is certainly a feasible outcome.

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 extract the most from 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.

Australian dollar outlook : Will the RBA cut interest rates?

The Reserve Bank of Australia has been predicted to be cutting interest rates in the future, despite not so far making any firm inroads into the plans. Their Tuesday interest rate decision saw the Australian central bank confirm that they are taking note of the recent shifts globally but that it has not shifted their current outlook on interest rates.

The currency markets are however quite sceptical over this seem to feel that in fact the RBA will be forced to cut sooner than later. Global growth has slowed and despite some apparent respite in the Chinese to US Trade Wars, the market seems to think there is more chance of the Australian interest rate being lowered in the future. Expectations are rising that the global economy will slow in the future and and a commodity based currency, the Australian dollar will suffer.

The Australian dollar will rise and fall on the alternating prospects in the global economy, the current belief is that the general trend lower will continue. Of particular concern is the outlook for China where the market is finding concern over what lies ahead. The Chinese economy is suffering as investors face difficulty over what lies ahead and continue to predict a longer term decline of the Chinese economy.

Investors face many challenges in 2019, not least with the rising uncertainty over the negative outcomes from the Trade Wars, which will only see further uncertainty in the future on global trade. Clients with a position to buy or sell Australian dollars should it appears be gearing themselves up for a potentially weaker Australian dollar in the future.

If you have a possible transfer and wish to get an update on the latest news and information concerning the Australian dollar and what might lie ahead, then please do not hesitate to get in touch to discuss this further. We have a range of tools and options to help you to maximise your position, please email me Jonathan Watson on jmw@currencies.co.uk.

GBP to AUD Strength – Brexit Imminent (James Lovick)

The pound to Australian dollar exchange rate has rallied higher with rates for the GBP vs AUD pair sitting above 1.86. Brexit continues to dictate the direction of travel for GBP AUD and the more optimistic mood on reaching a deal is helping to support the pound. The markets have begun pricing in the prospect of a deal being reached by 29th March and failing that there is a chance that an extension of Article 50 may be required. Either outcome gives more certainty in the markets as to what the economic picture looks like for the next 18 months.

What is important to highlight is that the chances of a no deal Brexit are looking less likely which is seen as positive for sterling exchange rates. Meetings between Brexit Secretary Stephen Barclay and Attorney General Geoffrey Cox and their EU counterparts resume today seeking to find legally binding changes to the contentious Irish backstop. Any breakthroughs this week could help lift the pound higher although to date there haven’t been any offerings from the EU to suggest a compromise is in the offing.

The hugely important meaningful vote is to be held before 14th March and the outcome should present considerable volatility for GBP to AUD. If the government is unable to push the vote through then the pound faces another uncertain two consecutive days as more votes will be held in parliament. Bank of England Governor Mark Carney will be speaking later today and any negative comments which he is known for especially when it comes to Brexit could see the pound come under pressure.

The Australian dollar could be set for a big boost in the weeks ahead depending on how the ongoing trade talks between the US and China unfold. Reports have emerged that the two sides are close to making a deal which should be seen as positive for the commodity currencies including the Australian dollar. A future US trade deal which will remove all of the already imposed tariffs and barriers to trade should be seen as welcome news for the global economy. In turn this bodes well for the Australian dollar due to the large volume of exports of its commodities. When the global economy performs in theory so should the Australian dollar.

For more information on the Australian dollar and how these events have a direct impact on your own currency transfer then please feel free to contact me James at jll@currencies.co.uk and I will be happy to assist.

RBA expected to keep rates on hold, but could GBP/AUD see further gains this week?

Over the past week we’ve seen the GBP/AUD rate hit the headlines after the rate hit an almost 3-year high. With Brexit now just a few weeks away the Pound has defied many expectations and strengthened across the board of major currency pairs with GBP/AUD hitting 1.8732 at its highest point. At the time of writing the pair remain north of 1.87 on another strong start for the Pound so I wouldn’t be surprised to see the current 52-week high of 1.8732 tested again, if not today perhaps later this week.

Sterling has been climbing since the path for Brexit became clearer, and a number of MP’s have suggested they could support the Prime Ministers Brexit deal when the next vote takes place. The next meaningful vote will take place on the 12th of this month and after Theresa May lost the last key vote on this matter by a record margin I expect all eyes to be watching the Pound and the outcome of the vote on the 12th.

This evening UK time the Reserve Bank of Australia (RBA) will announce their next interest rate decision. No changes are expected from the record low of 1.5% but the comments afterwards from the RBA could impact AUD exchange rates so it’s worth being aware of this release as the last time the RBA made some dovish comments and indicated that there could be further cuts we saw the Aussie Dollar sold off.

I expect political updates from the UK especially regarding Brexit to remain the main drivers of currency fluctuations owing to the Brexit being just a few weeks away now.

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.

AUD Forecast – Will GBP/AUD Rates Reach 1.90 Over the Coming Days? (Matthew Vassallo)

The Pound has seen its value steadily rise against the AUD over the course of the trading week, moving back above 1.87 at the high overnight.

Whilst the AUD has found some support today around the current levels, the long-term outlook for the Australian economy remains dovish to say the least. Westpac, one of Australia’s largest banks has predicted further interest rate cuts by the Reserve Bank of Australia (RBA) this year.

With interest rates already set at record lows of 1.5%, any further decreases are likely to add to the growing sense that the Australian economy is set for a period of stagnation.

Add to this the prospect of Brexit talks finally moving yielding some kind of positive outcome, and it’s conceivable to imagine the Pound making further inroads back above 1.90.

Whilst the current outlook may seem more favourable for Sterling, the current optimism is based on Brexit talks actually yielding a positive outcome ahead of the second “meaningful” vote. This is scheduled to take place by March 12th and it will give UK MP’s the chance to vote on any amendments to UK PM Theresa May’s original Brexit withdrawal agreement with the EU.

Should the PM manage to negotiate any amendments, they would almost certainly have to include some type of concessions from the EU regarding the current Irish backstop arrangement. Many of the MP’s who voted against the PM’s initial deal in the House of Commons have stated that this is the key issue that needs to be resolved.  Therefore any softening the EU’s stance on this contentious issue, could bring it with renewed optimism that a deal can be reached by the current deadline of March 29th.

Needless to say any failure on her part to do so, will likely end the chances of a deal being agreed by the end of March and a different approach will have to be adopted. The EU would then have to grant an extension to the current deadline in order to help facilitate further talks, which will hopefully then lead to a positive outcome.

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 further?

The Australian dollar has been weaker as poor economic data and also global concerns weigh on the currency. Investors have been closely monitoring developments with the trade wars, which have seen China and the US go head to head threatening increasing tariffs on each other. There has also been the North Korean – US Summit in Vietnam, which has not proved successful for Trump, thereby putting further pressure on the Australian dollar.

The Australian dollar is a barometer of global trade which has seen the market moving in the favour of any clients looking to buy the Australian dollar, expectations are for a very busy time ahead, as investors seek greater clarity on what lies ahead. Global trade could now be under greater pressure as investors seek to obtain more certainty around the Trade Wars and the possibility of destabilisation in the North Korean peninsula.

The Australian dollar is also suffering from pressures at home, as investors seek to obtain greater clarity over the outlook globally, and the RBA, Reserve Bank of Australia, seek to consider cutting interest rates in order to ease the wheels of their economy, in order to be able to manage any possible downturn.

The slowing economy globally, and increased uncertainty in global markets, has seen the Australian economy weaker as it depends so much on strong global demand for its natural resources which include coal and aluminium and other commodities. The Australian economy has been weakening owing to these global concerns and this is now beginning to weigh on the market, as investors seek other shores and remain unconvinced about what lies ahead.

Clients with a position to buy or sell Australian dollars should be aware of a few volatile sessions ahead, we are in business to help with the planning and execution of any transfers. GBPAUD in particular, could be in for a very volatile month as we await the latest news from the Brexit. Trading levels on GBPAUD could ever surpass 1.90 at the top end of the ranges.

Thank you for reading and please let feel free to contact me if there is anything that you wish to discuss for the future.

Jonathan Watson

jmw@currencies.co.uk

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

Progress in US/China talks

Due to Australia’s heavy reliance on China purchasing its goods and services any fall in growth from China has an impact on the Australian economy and in turn the Australian Dollar.

The US/China trade war is a huge concern amongst investors, a trade war between the world’s two largest economies has huge implications. The Trump administration wants China to change its economic strategy, something Chinese President,  Xi Jinping will be reluctant to do. The changes that are being asked for would hit the Chinese economy hard and  long term. It may be the case that the Chinese will try and give very small concessions in  bid to lengthen the trade war and out last Trumps reign. A dangerous game considering the US has threatened to increase tariffs to 25% should their terms not be met. 25% is a huge increase and if China retaliate both economies will suffer not to mention the global impact.

At present, trade talks seem to be progressing well.  When asked about how talks were going yesterday in Beijing, US Treasury Secretary , Steven Mnuchin replied “so far so good.”

If it were not for the lack of clarity surrounding Brexit I think Sterling would be making gains against the Aussie. Although, the pound could lose value as negotiations with Brussels intensify I think the likely outcomes are either an 11th hour deal or an extension, both of which could cause significant Sterling strength. Morgan Stanley recently suggested there was less than a 5% chance of a no deal scenario. The market moves on rumour as well as fact so due to a no deal Brexit being largely factored out of the equation at present, if it were to occur expect  a large drop in the pound as this outcome is definitely going against the grain.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavour 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.

AUD Forecast – What are the Current Factors Affecting GBP/AUD Rates? (Matthew Vassallo)

The AUD has seen its value slip against the Pound over the past week, falling back below the key threshold of 1.80.

GBP/EUR rates were trading above 1.82 yesterday and despite the AUD finding some support around this level, it has yet to threaten any significant realignment against the Pound.

As regular readers will know, much of the current market sentiment and ultimately investors risk appetite on GBP/AUD, is being driven by the prospect of a no-deal Brexit with the EU. Whilst the UK government and Brussels are yet to agree upon the final transition, there is still hope that a deal will be in place prior to the deadline of March 29th, the date by which the UK must exit the single bloc.

Whilst Brexit uncertainty has proved a major handicap for the Pound for a prolonged period, it is also likely to have helped to support the AUD, at least to some extent, during a period of deep economic instability for the Australian economy. In fact, due to the major slowdown in global trade, brought about partly because of the escalating trade stand-off between the US & China, the AUD could have expected heavier losses against GBP, than it has experienced up until this juncture.

The AUD, like all commodity-based currencies, relies heavily on a buoyant global market to proper. In years gone by it has always been considered a riskier asset, which in times of global growth can bring about quick returns due to the generally bigger market swings and at one point higher yields due to an attractive interest rate.

Of course, the flip side brings with the potential of heavy losses and with interest rates now at record lows for a prolonged period, the AUD is not as an attractive propositions as it once was for investors.

If the UK and EU to agree upon a Brexit deal over the coming weeks, then the market spike could be favourable for the Pound. I would anticipate that the AUD could see heavy losses in the short-term, with a move back above 1.85 likely and the pliability of a run at 1.90 distinct possibility.

If you do have a GBP or AUD currency exchange to make, it is key to try and minimise your market risk in such an uncertain climate. Here at Foreign Currency Direct plc we can help you guide through this turbulent market, providing key insights and up to date market analysis.

We can help you maximize your currency exchange by providing award winning exchange rates and a pro-active approach to currency transfers.

Please feel free to contact me directly on mtv@currencies.co.uk, or alternatively you can call the office on 0044 1494 787 478.

US China Trade War Intensifies (Daniel Johnson)

AUD losing investor confidence

Australia is heavily reliant on China purchasing its goods and services. Any fall in Chinese growth has a knock on effect on the Australian economy and in turn the Australian Dollar.

The US China trade war is a serious concern for investors and it is pushing them away from riskier commodity based currencies such as the Australian Dollar. The US and China are currently in talks and the Trump administration wants China to make fundamental  changes to its current economic strategy.

If China were to make some of the changes requested it would have serious implications on the Chinese economy. Chinese President, Xi Jinping knows this and it may be the case that he will try to make as little concessions as possible in an attempt to outlast Trump’s reign.

It is a risky game considering the US has threatened to increase tariffs by 25% on $200bn worth of goods. The US has said they will implement the tariffs if the two sides fail to make progress by 1st March.

According to a UN trade agency report Asian countries would be the most effected. The implications of such an increase should not be understated. With two super powers trading blows the effect will be wide reaching and will hit the global economy.

The Australian Dollar could be among the hardest hit until we have a resolution, which could be some way off, AUD will remain fragile.

If it were not for the lack of clarity surrounding Brexit I think we could see some decent gains for Sterling against the Aussie, unfortunately the uncertainty over Brexit is outweighing concerns down under and the Pound continues to be anchored at low buoyancy levels. There are alternative options to May’s deal being put forward, but there is still no firm way forward. May’s intention is to gain concessions from Brussels that will be accepted by parliament. She has already attempted to this in December after delaying the initial vote. May was stone walled by Brussels and European Commission President, Jean Claude Junker has continually stated there will be no concessions made. Many still believe a deal may be struck at the 11th hour, but Brussels have stuck to their guns up until this point. The PM is currently in a worse position than in December following the diminishing probability of a no deal scenario (one of her only sources of ammunition) with Morgan Stanley predicted there is less than a 5% chance of a No deal Brexit.

If you are looking to move GBP – AUD short term aim for the 1.83s.

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 18yrs 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. I can be contacted at dcj@currencies.co.uk.

 

 

 

AUD Forecast – Heavy Losses for the AUD Overnight as Interest Rate Hike Looks Extremely Unlikely (Matthew Vassallo)

The Pound has made significant gains against the AUD overnight, gaining almost three cents.

It currently trading at 1.8176, having been marooned below 1.79 during the early part of the trading week.

What’s surprising is that this improvement has come about despite the on-going uncertainty surrounding the UK’s impending Brexit, with talks between the UK and EU once again seemingly at an impasse.

This indicates that last night’s heavy losses for the AUD were linked to a sharp drop in investor confidence in the AUD, rather than any major influx into the Pound.

This means those clients holding GBP and looking to buy AUD have been given a window of opportunity, which equates to an additional 3000 AUD on a 100k GBP/AUD currency exchange.

The reason the AUD lost significant value is likely linked to comments made overnight by the governor of the Reserve Bank of Australia (RBA) Philip Lowe, who indicated that the central bank were unlikely to raise interest rates anytime soon, meaning that they will likely be kept at record lows for the foreseeable future.

The Australian economy was already under pressure due to the current trade standoff between the US and China. With no long-term solution in sight, despite rumours that President Trump will meet his Chinese counterpart Xi Jinping this month, the outlook for the AUD does not look overly positive.

Australia relies heavily on trade with China and with China’s demand slowing, this will inevitably have a negative impact on the Australian economy and ultimately the AUD.

With a slowdown in global growth also impacting commodity-based currencies such as the AUD, how GBP/AUD rates will evolve over the coming weeks and beyond, will depend much on whether or not the UK can ultimately agree a Brexit deal with the EU.

If the UK fails to do this, then the AUD is likely to be inadvertently boosted by a sell-off of GBP positons.

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.