Category Archives: Australian Dollar Forecast

Important events on the Australian dollar this week

The Australian dollar exchange rate has been volatile in the last few weeks owing to the uncertainty over the future direction we will see on a number of factors. These include the Trade Wars with China and also the outcome from the latest economic data in Australia. Investors are expecting us to see the Australian currency closely reacting to developments on these issues, the immediate outlook is not clear.

China’s economic performance is a key indicator of the Australian dollar as investors track its progress with a view to better understanding where events will turn next. One of the key factors in all of this will be the next steps that the Trade Wars take with investors feeling any negative news would see the Australian dollar weaker.

Overnight are two speeches by RBA, Reserve Bank of Australia, members which will carry some weight in the market. The actions and comments by the central bank are very important in providing some direction on which way the currency will perform in the week ahead. Most notably ahead is the speeches by Assistant Governor Bullock and also Debelle, either of which could prove most interesting for the Aussie.

Last week, there was some more positive Unemployment data released which will have had a more swaying impact on future economic policy from the RBA. Other news I would foresee as being instrumental in shaping the likelihood of market fluctuations will be the ECB interest rate decision. The European Central Bank will provide some insight into their own future monetary policy as well which will influence global risk sentiment.

In targeting a higher interest rate over the longer term, the Australian dollar exchange rate could lose value if investors look to try and shift towards the potentially higher yielding Euro.

If you have a currency transfer involving the Australian dollar and wish to learn of some of the latest market news, please do not hesitate to contact me Jonathan Watson directly.

Jonathan Watson

jmw@currencies.co.uk

Chinese GDP falls but Brexit talks may be extended so Pound gains vs the Australian Dollar are limited

Overnight the world’s second largest economy China confirmed that it grew at its slowest quarterly rate in ten years as the problems of the US-China Trade Wars appear to be having an impact on the economy.

According to official sources the previous quarter showed growth of 6.5% compared to the year before and this was short of the forecast figure of 6.6%.

However, although the headline figure is clearly a concern for the country it was still in line with the government’s target for this year of 6.5%.

Typically this would result in Australian Dollar weakness as China is their largest trading partner so any slow down will often result in problems for the Aussie Dollar.  However, as we have seen during the course of this week the Pound has faced some problems owing to the roadblock concerning the latest Brexit talks which appear not to have gone anywhere at this week’s EU summit.

Indeed, the latest news appears to be that the parties involved are looking to extend the current time lines in order to ensure a smoother Brexit. The European Union has offered to extend the amount of time needed for the post-transitional period for the UK.

This has caused the Pound to come to a bit of a brick wall in terms of making further advances against the Australian Dollar and next month’s Brexit summit appears to have been cancelled for the time being.

I have worked for one of the UK’s leading currency brokers for 15 years and I’m confident that with my experience I can help you with both the timing of your transfer of Australian Dollars as well as being able to save you money on exchange rates compared to using your own bank.

Please send me an email with your requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

AUD Forecast – What are the Factors Driving GBP/AUD Exchange Rates? (Matthew Vassallo)

GBP/AUD rates have dipped slightly during Thursday’s trading, with the AUD continuing to find support around the current levels.

The pair fell to a low of 1.8338, having been trading above 1.84 at its high over night.

The Pound has failed to make any sustained inroads against the AUD since the weekend, after premature talk of a Brexit agreement caused a sharp sell-off of GBP positions on Sunday.

This put the Pound on the back foot when trading lines opened on Monday. It has been a tough week for Sterling, which has seen its value decrease by around three cents, or the equivalent of 3000 AUD on 100k GBP/AUD currency exchange.

I anticipate that the AUD will now find plenty of support again around 1.85, when it seemed as though the Pound was set for a run on 1.90 last week, when a Brexit deal looked imminent.

This is another prime example of how the markets may price in an expected political outcome, only to see the currency in questions value diminish when the expected result does now come to fruition.

Looking at the driving factors behind GBP/AUD and any updates or breakthrough in Brexit talks, will no doubt boost investor confidence and the Pound is likely to benefit as a result. Similarly any talk of a no-deal outcome again and it will likely have the opposite e effect.

Looking at the Australian economy and current slowdown in global trade is certainly having a negative impact. This, along with the current trade war between the US & China is causing investors to shy away from riskier currencies such as the AUD. We generally see commodity-based currencies such as the AUD lose value during times of global economic uncertainty.

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.

 

Weaker AUD beneficial for the Australian economy, where next?

The recent RBA, Reserve Bank of Australia Minutes showed us that the RBA view the recent weaker Australian dollar as good news for the economy in helping to support growth. Australia’s economy is heavily reliant on the sale of its raw materials globally, including to China, its major trading partner. The expectation here is that the RBA will not be in any rush to raise interest rates, they view the weaker currency as ‘good news’.

The big news for this week on the Australian dollar is Unemployment data released in the early hours of tomorrow, at 12.30 GMT. The figures are predicted to show the Unemployment rate holding steady but a lower participation rate and possibly a lower employment rate. This could see the Australian dollar weaker as it underscores the recent direction and sentiment that has weakened the currency.

This could mean the Australian dollar continues to drift lower and remain weak, particularly owing to other factors including the likelihood of Trade War issues continuing to weigh on China, its largest trading partners. Markets are concerned that the Chinese economy is struggling as a result of the trade disputes with the US and Donald Trump, this has seen some economic indicators in China reach concerning levels.

China is struggling with a slowing rate of growth and concerns over home sales, rising Inflation and also falling car sales. Other examples of anxiety include the amount of debt taken on by Chinese authorities in their pursuit of infrastructure to build their economy. All of this is painting a slightly worrying picture for the Chinese economy as the trade wars are likely to get worse and this will all put pressure on the Aussie dollar too.

If you have a transfer involving the Australian dollar into any other currency and wish for some expert insight into the trends and themes to move the market, why not get in touch with us. We are a firm of specialist FX brokers with many year’s experience in managing large volume international payments.

Thank you for reading and we hope to hear from you soon.

Jonathan Watson

jmw@currencies.co.uk

Could the Pound improve against the Australian Dollar after RBA minutes and EU Summit this week?

The Reserve Bank of Australia published their latest set of minutes which confirmed interest rates would be kept on hold for the time being which has led the Pound to hit 1.85 against the Australian Dollar overnight leading to some excellent opportunities to buy Australian Dollars with Pounds this week.

With property prices starting to fall in both Sydney and Melbourne the RBA’s tone was rather cautious. Indeed, property fell by 6% in Sydney and 4% in Melbourne, which have previously been the best two performing markets in recent years.

The central bank went on to warn the markets that the trade policies between the US and China could continue to cause potential negativity for the Australian economy but that as Australian growth is at 3% the economy is still relatively robust.

However, as house prices are falling and wages are not going up that quickly this is why interest rates in Australia are not likely to be going up anytime soon and predictions are that the next interest rate hike may not come until 2020.

Meanwhile, the Pound is being affected by what is happening with the latest Brexit discussions and with the EU summit due to start tomorrow and conclude on Thursday the main topic will be that of the Irish border issue which appears to be far from getting sorted.

Previously, the discussions were due to end by this particular meeting but with an emergency Brexit summit planned for next month we may not see the talks concluding positively this week so be prepared for a lot of volatility coming in the next few days if you’re planning a currency transfer involving the Pound vs the Australian Dollar.

If you have a currency transfer to make and would like to save money when converting Australian Dollars then contact me directly for a free quote and a brief description of your requirement and I look forward to hearing from you.

Tom holian teh@currencies.co.uk 

Outlook for Pound Sterling vs the Australian Dollar rates and could we see 1.90 before the end of this month?

The Pound vs the Australian Dollar has seen some very positive movements over the last few weeks and this has caused GBPAUD exchange rates to hit the best level to buy Australian Dollars with Pounds for over two years when the Brexit vote took place in June 2016.

The Reserve Bank of Australia has warned of the risks that the Australian economy is facing over the issue of the trade wars between the US and China and at the moment this issue is still rumbling on with no signs of dissipating.

Chinese stock markets have fallen by over 20% in the year to date and as China is such a large trading partner for Australia any signs of a slowdown can really harm the value of the Australian Dollar and this is one of the reasons for the weakness of the Australian Dollar recently.

Signs coming from the Brexit talks are that things are getting relatively close to reaching a conclusion and it appears, at least for the moment, that a deal may be reached fairly soon which has helped to support the Pound vs the Australian Dollar.

Brexit secretary Dominic Raab is due in Brussels on Monday and hopes are that he is there to try and tie up a deal but I cannot see this happening just yet.

Indeed, the EU summit will be held on Wednesday for two days and there is a hope that a deal may be reached and if so we could see a very volatile period coming up for anyone thinking about moving Sterling either to buy or sell Australian Dollars.

Following this summit there is another meeting planned for November and I think this is when a deal between both the UK and the European Union will be reached and this could give Sterling the momentum it has been looking for to continue upwards vs the Australian Dollar.

If you have a large currency exchange to carry out in the coming days, weeks or months involving Australian Dollars 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Pound hits 2 year high to buy Australian Dollars (Tom Holian)

The Australian Dollar has continued to weaken against both the Pound and the US Dollar recently as investors have begun to bypass the Australian Dollar as interest rates down under appear to be staying the same for the foreseeable future.

The Reserve Bank of Australia has kept interest rates on hold at 1.5% again this month and they have not changed interest rates in two years and with the US continuing to hike interest rates the Australian Dollar has been sold off in favour of the US Dollar and this has weakened the AUD against a number of different currencies including Sterling.

The Pound vs the Australian Dollar is now trading at its best level to buy Australian Dollars since the Brexit vote back in June 2016 and the question really is how long will this rally for Sterling last?

Clearly the Pound is under a lot of pressure at the moment with the ongoing uncertainty caused by the Brexit talks but the sentiment appears to have been softening recently towards the UK and rumours are that the talks could be concluded by next month.

If this does happen we could see the Pound make even further gains as this will provide investors with more certainty as to what to expect moving forward and encourage them to invest into the UK.

The Australian Dollar has also felt the negative effects caused by the Trade Wars between the US and China.  As China is Australia’s largest trading partner any problems in the second largest economy will often have negative effects on the value of the Australian Dollar and I think this could continue to harm the economy and therefore cause further Australian Dollar weakness for the Pound.

I have worked in the foreign exchange markets for one of the UK’s leading currency brokers for over 15 years and with my experience I’m confident that not only can I save you money when exchanging Australian Dollars but also help you with the various options available to you.

Email me directly and I look forward to hearing from you Tom Holian teh@currencies.co.uk

Is now the time to sell Austrlian dollars and buy sterling?

Last week the Australian dollar fell to multi year lows against sterling and the US dollar and the economic indicators suggest that further losses are on the horizon for people selling Australian dollars. For people that are researching potential events that will impact the Australian dollar, you should have come across the reasons for why the Australian dollar has been devaluing. The key driver is the strength of the US dollar.

Carry traders which borrow money in low interest rate jurisdictions and invest in high interest rate jurisdictions are not choosing the Australian dollar like they once were because US interest rates are now higher than in Australia and it looks like the gap is set to widen when the US raise interest rates in December.

The other major problem for Australia is that they are stuck in the middle of the trade war between the US and China. Australia heavily relies on China for trade, however Australia also relies heavily on the US for security. At present the trade war between the two leading countries is having a negative impact on the value of the Australian dollar and I expect this trend will continue.

As the UK are now closer to securing a deal with the EU, it looks like GBPAUD exchange rates are heading in one direction and that’s towards 2. For people that are selling Australian dollars to buy sterling you are still generating an additional £15,000 on a 500,000 transfer compared to pre Brexit levels, therefore taken advantage now may pay be your best option.

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.

 

Sterling hits 2 year high vs the Australian Dollar as Brexit talks progress (Tom Holian)

The Pound vs the Australian Dollar has now hit its best level in over two years as the Brexit talks appear to be gathering pace.

At the time of writing GBPAUD exchange rates have hit 1.85+ which is the best level since the day of the Brexit vote back in June 2016.

According to a number of different sources the Irish border issue appears to be getting closer to being resolved and we are just less than two weeks away from the EU summit due to take place on October 18th.

The main topic will clearly be what happens with the ongoing Brexit talks and with the Head of the EU Commission Jean-Claude Juncker suggesting that if a deal is not reached this month it could be concluded next month the Pound has made some huge gains against a number of major currencies including the Australian Dollar which is great news for anyone looking to send money to Australia.

Meanwhile, with the US Federal Reserve having increased interest rates to 2.25% recently the disparity between what is available in terms of interest in Australia compared to that of the US now stands at 0.75% which is the biggest difference since the Australian Dollar was launched over thirty years ago.

In recent years the Australian Dollar has been the benefactor of higher interest rates compared to that available in many other western economies but with interest rates now higher in the US and also showing US GDP at 4% then global investors appear to be bypassing the Australian Dollar at the moment.

Indeed, the ongoing Trade Wars between the US and China do not appear to be slowing down and as China is Australia’s biggest trading partner any negative news will often affect the Australian Dollar and this is another reason for the GBPAUD exchange rate moving in an upwards direction at the moment.

I think a deal is fairly close to being agreed at the moment and if and when this happens I think it will provide the UK with some certainty going forward allowing the economy to know what to expect and I think this is why we could see GBPAUD exchange rates continue to go up if the talks progress positively in the next fortnight.

If you have a currency transfer to make and would like to save money when converting Australian Dollars compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident that I can also help you with the timing of your transfer.

Email me directly Tom Holian teh@currencies.co.uk

Price changes for GBP/AUD likely to be driven by the Pound over the next 24-hours

Those of our clients and regular readers following the Pound to Australian Dollar exchange rate should pay close attention to UK politics today, as I believe the next spike in the GBP/AUD’s value is likely to be driven by UK politics.

Yesterday all eyes were on Boris Johnson’s speech at the Conservative Party Conference, and he didn’t disappoint as he gave another harsh critique of the ‘Chequers plan’ devised by the current UK Prime Minister, Theresa May. Today there could be movement for Sterling exchange rates against all major currency pairs as it’s the final day of the Conservative Party Conference, and Theresa May is scheduled to speak with Brexit being the main focus.

Yesterday Boris Johnson was supportive of May’s leadership but he once again urged her to move away from the Chequers plan she has devised and suggested that she focuses more on a Canadian style deal. I expect her to be questioned on his comments and the markets to follow her responses closely. With Brexit now just around the corner and expectations of a deal being in place by November, I expect to see Brexit headlines dominate financial media and for it to be the main driver of the Pound to Aussie Dollar exchange rate.

On the Australian side we’ve seen the currency soften over the past year, mostly owing to Aussie Dollar weakness. The greater the gap between US and Australian exchange rates the more likely this trend will continue, so those following the strength of the Aussie Dollar should also pay attention to US monetary policy and this is something we can help our readers with should they wish.

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.