Category Archives: Australian Dollar Strength

Sterling falls against the Australian dollar due to meaningful vote cancelled

In recent weeks the pound has been falling dramatically against the Australian dollar and this trend continued throughout yesterday trading session as Theresa May cancelled the meaningful vote in Parliament. Furthermore the Prime Minister made a statement about why she had cancelled the vote and the general consensus was because she was going to lose and therefore she was going back to Brussels this week for further guarantees. Following the statement in the House of Commons Theresa May answered questions from fellow MPs and the Prime Minister came under further pressure and this was represented in the exchange rates.

GBPAUD dropped throughout the day from 1.7725 to 1.7475. To put this into monetary value a AU$400,000 transfer now costs an additional £3,300 compared to this time yesterday. 

The Prime Minister has now flown to Hague to discuss Brexit with Mr Rutte, the Prime Minister of the Netherlands. Mr Rutte has been known to give an extra helping hand for the Prime Minister and this is why I believe this is her first trip. Thereafter she is set to travel to Berlin to meet to meet Angela Merkel and then hold talks with the European Commission.

If its the case the Prime Minister fails to receive further reassurances from the EU, it looks like her days are numbered. If the Prime Minister was ousted or resigns a leadership contest would take at least a couple of weeks especially over the Christmas period. therefore I expect this would put further pressure on sterling and GBPAUD would fall further.

Looking further ahead I expect the pound will continue to decline against the Australian dollar and fall to the low 1.70s or even the high 1.60s. However if the Prime Minister manages to get further concession which is extremely unlikely the pound could rebound significantly making Australian dollars cheaper to buy.

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.

 

 

Australian Dollar strengthens following China/US Truce (Daniel Johnson)

Trump holds back on Tariffs

Following the G20 in Buenos Aries the United States and China have called a truce on their trade war. On Saturday Trump agreed to hold back on new tariffs and President XI Jinping has pledged to increase Chinese purchases on US goods. Be wary of thinking this trade war is over however, further negotiations are ahead and they are set to be time consuming and problematic. Both leaders still seem to be holding their stance on the key problems of trade.

Trump has agreed to postpone a plan to raise tariffs on USD 200bln worth of goods to 25% from 10% in January. The Chinese have agreed to increase their purchases of industrial, agricultural and energy products which China had hot with retaliatory tariffs after Trump had implemented a wide range of tariffs.

There are now set to be 90 days of talks and Trump has threatened that if the trade differences are not resolved he will proceed with his 25% tariff.

Brexit Farce continues

The Truce has caused a spike in Australian Dollar value making further gains against Sterling which is also being weighed down by the complete farce which is Brexit. May’s Brexit deal is due to be voted on by parliament on 11th December and it is being widely criticised. If the vote does not go through Labour will challenge May’s position which would no doubt hit the Pound further. There is also the possibility that if the deal is not voted through amendments will be made before a second vote within 14 days of the first. I hope this is the more likely outcome as the alternative would mean chaos and no doubt sterling will take a severe hit.

I am afraid short term Sterling has little chance of making any significant gains against the majority of major currencies. If you have to move short to medium term I would consider performing a tranche at current levels.

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.

 

 

 

Australian Dollar to Pound Rates Strengthen on Hope of Positive G20 Summit (James Lovick)

Pound to Australian dollar exchange rates have fallen lower to below 1.75 for the GBP AUD pair as Brexit uncertainty remains the biggest threat to the pound ahead of the parliamentary meaningful vote around the 12th December. There are reported 100 Conservative MP’s who have signalled that they will vote against the Prime Minister which leaves an even more uncertain period ahead. If the Prime Minister is unable to push forward with her Brexit deal then there are a number of different outcomes. A second vote in the House of Commons is perhaps the most likely outcome although a change of Prime Minister, a second referendum, a no deal Brexit or a Norway style trade deal cannot be ruled out.

The EU have stated that this is the best deal the UK will receive so in the event that Theresa May is unable to secure a better deal then the prospect of no deal in my view is starting to look much more likely to happen. The Bank of England has made worst case scenario predictions that there could be a crash in the pound of up to 25% which is making the price of sterling extremely sensitive to political developments in the UK.

The Australian dollar could also see a substantial boost if there is a breakthrough or at least a statement of intent for the US and China to reduce tariffs on trade and come to a future trade agreement. The Australian dollar could be big beneficiary if progress is made at the G20 summit this weekend where a slot has been put aside for US China talks. We’re not there yet and US President Donald Trump has been threatening more tariffs this week so it remains to be seen how constructive these talks will be if talks don’t well and tariffs are imposed on all Chinese goods then the Aussie could weaken considerably lower as those concerns grown on the future of global growth.

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

Will the current Brexit deal make it through Parliament? (Daniel Johnson)

GBP/AUD – Brexit continues to be the main driver on GBP/AUD. Despite little movement on the market we did see significant progress in negotiations this weekend. Yesterday saw the current Breixt draft agreed. The deal was accepted by Brussels after just 38 minutes. All 27 member states endorsed the agreement after 18 months of  uncertainty. The £37 billion exit fee was confirmed along with the elusive back stop agreement on the Irish Border. It also gave an insight into trade relations moving forward.

Perhaps the reason we did not see a boost in Sterling was that the market had already moved on rumour. It was common knowledge that the deal would go through following May conceding on the Gibraltar situation. Investors are aware the real test for the deal is when it is put before parliament for acceptance. This is expected to take place in the next two weeks prior to the Christmas recess.

May has also released an open letter to the public in an attempt to get support for the deal. She has stated it is this deal or no deal. The majority pf book makers have it at around 50/50 the bill will be passed.

Theresa May’s position under Threat

Theresa May’s position is still under threat, there are rumours of around 35 letters of no confidence that have been put forward, 45 are required for a leadership challenge. It may be the case that some MPs are hanging on for an opportune moment as a leadership challenge can only be undertaken once over a 12 month period.

While the deal has not been approved by parliament I expect the Pound to remain vulnerable. If I had to put my money on it I would say a deal will go through. The threat for the Tories is that if a leadership challenge takes place and the potential new leader fails to gain a majority victory they could be looking at a general election and risk Labour gaining power. Brexit would also be thrown completely up in the air. No doubt this would cause Sterling weakness.

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 endeavor 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.

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

Pound to Australian Dollar Forecast and the impact of the Brexit deal

After hitting above 1.80 earlier this month the rate to buy Australian Dollars with Pounds has fallen in to the 1.75 levels on the Interbank.

Primarily this was caused by the huge losses in the value of the Pound against a number of major currencies owing to the issues surrounding the proposed Brexit deal.

However, it was not just the news in the UK that caused the Pound to fall against the Australian Dollar.

During the course of this week the economy down under showed an improvement in the unemployment rate which fell to 5% and this caused investors to move money in to the AUD as it shows signs of a more positive economy.

The main news that caused the drop in the value of the Pound was the proposed Brexit deal. This caused a number of senior ministers to hand in their resignations including Brexit secretary Dominic Raab. He left citing differences in the deal and that he could not be part of the government owing to certain issues in the proposed deal which he could not agree upon.

Could the Brexit deal be changed?

Meanwhile this weekend a number of senior ministers in the Conservatives are planning to try and make changes to the draft Brexit deal.

Included in the group are Michael Gove and Liam Fox who have previously thrown their support behind Theresa May.

The Prime Minister has been busy trying to persuade the British public that she is determined to see this deal through.

The next stumbling block could come on 25th November when the EU summit takes place. The likelihood is that this is likely to get ratified but the real sticking point will come when the parliament has its say.

The current expectation is that the EU will approve the deal but that parliament will reject it and then the UK government will have 21 days to put forward a new plan and I think this will will increase the pressure on the value of the Pound.

Therefore, if you’re planning to buy Australian Dollars in the near future it may be worth getting this organised relatively quickly.

If you are thinking about making a currency transfer and would like to save money when transferring Australian Dollars then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

Pound to Australian Dollar Forecast – GBP AUD Crashes after Brexit Secretary Resigns (James Lovick)

Pound to Australian dollar exchange rates have crashed dramatically with rates falling by more than 2% to the lows of 1.75/1.76 after a brutal day in British politics. UK Prime Minister Theresa May has reached an agreement with the EU over the draft withdrawal agreement but support from her cabinet is not unanimous. So far and in a single day there were seven government resignations including Brexit Secretary Dominc Raab which sent the pound tumbling. GBP to AUD rates now face yet another volatile day as the markets prepare for more government resignations and a possible leadership challenge.

Brexit supporter and chair of the backbench European Research Group has called for a vote of no confidence in the Prime Minister and believes that enough letters to the 1922 Committee will be reached in the comings days to trigger a vote of no confidence. The Prime Minister must also put in place a new Brexit Secretary and it has been reported that Environment Secretary Michael Gove has turned down the offer. Where that leaves Michael Gove is less clear and many are expecting a resignation which would add more pressure on Theresa May and further weakness for the GBP to AUD pair. The outlook is so uncertain in British politics that there is room for further weakness for the pound against the Australian dollar in the short term.

The Australian dollar meanwhile has been boosted after strong employment data down under pointing to health consumer spending. A further 42,300 jobs were created in October which was significantly higher than the September reading. This will be welcome news for the Reserve Bank of Australia which has held concerns over weak wage growth and low inflation. The belief is that an improving labour market will feed through to higher wages which will allow the central bank to start raising interest rates. This is starting to look likely for 2019 with a good chance we may see the first rate hike in August next year.

There are likely to be major movements in these coming days. For assistance in making transfers either buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk

GBP/AUD drops after May’s Brexit deal looks unlikely to get the support she needs

The Pound is down across the board of major currency pairs today, in most cases by over 1% at least with the GBP/AUD rate down by over 1.6% at the time of writing. Yesterday the Pound was increasing in value on hopes of May’s cabinet supporting her deal, but this morning the situation is very different with Sterling under increasing pressure.

This morning its emerged that Dominic Raab, the Brexit secretary that took over from David Davis after he resigned, has this morning resigned himself stating that he ‘cannot in good conscience support the terms proposed for our deal with the EU’. This has put further pressure on Sterling with money markets now suggesting the chances of another interest rate hike from the Bank of England has now lowered.

Whether the Aussie Dollar will continue to climb against the Pound this morning will depend on whether there are further resignations from her cabinet, and also whether May can pass her Brexit deal through Parliament. The rumour mill suggests she will need to gain the support of of more than 50 hardcore Tory Brexiteers and Labour rebels. Donald Tusk has also hinted at concerns May could lose her position which would scupper the plans agreed over the past week.

Some key figures from within the hardcore Brexit movement have already announced their disapproval, and I think there could be further resignations based of the knee jerk reaction to her proposals.

Economic data is likely to take a back seat regarding GBP exchange rates at the moment, with Brexit remaining the main driver of currency value. If you wish to be updated in the event of a major market movement do feel free to register your interest.

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.

Does May have the backing to get her Brexit Plan through in January? (Daniel Johnson)

GBP/AUD – GBP/AUD again has fallen below the key resistance point 1.80. This was due to news Theresa May lacks support from the cabinet to push her Brexit plan through. It seems that every time the UK on the cusp of a deal there is a problem created not only from Brussels, but also from inner fighting within parliament.

It seems the Chequers plan was reluctantly backed in the first place due to the need for progress and the threat of a no deal. The backing of the deal has been described as a deeply undesirable compromise. A minster said that most of those who backed the deal did so “with a very heavy heart”.

Two cabinet ministers last night announced on the BBC that there is little chance that  the current deal would get through parliament and the Theresa May still pursuing agreement on the is deal could be considered “self harming”.

Even if a deal is agreed with Brussels the deal must then be voted through by the cabinet in January.

The EU withdrawal Act of 2018 highlights that the government must announce before 21st January  if it can or cannot reach a deal. If the date in not met the government will have 5 days to make a statement outlining how the UK wishes to proceed and subsequent arrangements for the motion to be passed through parliament.

Despite all this news I am still of the opinion a deal will be reached despite all the in house fighting, the consequences of not getting a deal is simply too great. Talks are intensifying and if there is solid news on the Irish Border I think we could see a Sterling rally. If you are looking at risk reward and are selling the Australian Dollar I would not hesitate to take advantage of current levels at 1.78. Pre-Brexit GBP/AUD was 2.20, although I do not expect a rally of this extent I think it is important to remember Sterling is chronically undervalued.

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

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

 

 

 

 

RBA Statement boosts the AUD: Where next for the Australian dollar?

The Aussie rises…

The Australian dollar is stronger overnight following an upbeat assessment from the RBA Monetary Policy Statement. The Reserve Bank of Australia is loosely looking to raise interest rates in the future which would help the AUD to rise. It has risen overnight following the commentary that saw them raise their Inflation and Growth forecasts.

Another factor to drive the Australian dollar is the outlook on the Trade Wars which have seen the Australian dollar rising according to the viewpoint on how it will influence the Chinese economy. Recent rising expectations that the Trade Wars would gently resolve themselves have cooled but the initial fears that saw the Aussie massively sold off, have subsided.

Global Issues remain

I expect the Trade Wars will continue to provide concern, it seems more likely than not that Donald Trump will trigger some kind of concern on global financial markets which would weaken the Australian dollar. If not owing to economic concerns abroad, it might be political concerns domestically in the US which drive the Aussie.

The recent mid-term elections saw the US dollar lose ground against most currencies with the Australian dollar a beneficiary of the uncertainty. The Aussie did rise on this news, as investors sought to diversify their currency exposure away from the US and possible political issues ahead.

As you can see, there are numerous global factors which drive the Australian. Trying to accurately predict what the rates will be will involve accurately predicting not only what Donald Trump might do, but also how the market might react to it. Some might suggest Donald Trump does not know exactly what he will do next, trying to predict him will be no easy feat!

What lies ahead for GBPAUD rates?

GBPAUD levels have fallen below 1.80 on the news, could the RBA be preparing to raise interest rates? Westpac do not think so, with them believing the RBA will hold through 2019 and 2020. There is even a view that the RBA may cut rates, by some who feel Australia’s booming housing market and highly indebted consumers cannot stand a hike.

Whilst the pound has been notably buoyant across most currencies, rising to some of the best rates all year or certainly multi-week or month highs, the pound to Australian dollar rate has not performed so well. Whilst we are tracking improved levels, we are still down owing to the Australian dollar also performing well.

GBPAUD exchange rates hit a peak of 1.8713 in October of this year, significantly above the 1.5909 lows of Brexit in October 2016 following the EU Referendum. Current rates of 1.79-1.80 are therefore below the peak but above the average.

Mix into this the uncertainty on Brexit (who can accurately predict the outcome there either?) and we have a plethora of events to move GBPAUD rates. My general expectation is that the pound will rise further against a weaker AUD if the global concerns continue on Trade Wars. I think the threat of a ‘new world order’ of more protectionism will see the Australian dollar weaker in the future, particularly as that uncertainty will keep the RBA on hold or possibly looking to cut.

Will you need to make a transfer?

For clients with a position selling Australian dollars for pounds, I feel gearing up to capitalise on the recent spike is sensible. Clients buying AUD with sterling might wish to take a slightly more speculative view but in hoping for further improvements, they could easily get caught out relying on a smooth Brexit process.

If you have a position to buy or sell AUD for sterling I would be most interested to share some of the latest news and events driving this pair. There is no easy answer to the question of ‘when is the best time buy or sell Australian dollars?’, but by careful analysis and utilising our experience in tracking trends, we do strive to offer an informed opinion to help you make the most of your currency needs.

Thank you for reading and please contact me to discuss further.

Jonathan Watson

jmw@currencies.co.uk

 

GBP AUD Exchange Rates Fall Below 1.80 (James Lovick)

The pound has fallen lower against the Australian dollar with rates for the GBP AUD pair falling below 1.80 once again. What happens in the US in these coming weeks and months is likely to have a big impact on the Australian dollar. With the US midterm elections out of the way it will be interesting to see how investors react to the news and if the results have an impact on whether he is able to implement his planned policies of increased expenditure in the US.

More importantly the future trade policy from the White house especially with China will be a major driver for GBP AUD rates. There have been noises that a meeting between China and the US could bear fruits for a future trade deal. Investors are concerned that an escalating trade war could have a negative impact on the Australian dollar as funds move to the safety of the US dollar. If an agreement can be reached though then this should benefit the Australian dollar going forward as confidence is restored in the commodity currency.

The Brexit negotiations have advanced in recent weeks which has helped boost the pound against the Australian dollar. Reports are filtering through in the media that we could be days away from a Brexit deal. Expect a few more weeks of heightened volatility though as any deal will have to be put before parliament which could make for a bumpy ride.

The Reserve Bank of Australia meet this evening and any clues as to when the central bank next raises interest rates is likely to see added volatility for the dollar. The US Federal Reserve are still set to hike interest rates again this year and a meeting is being held this evening. The markets are expecting a rate hike to come in December although anything is possible this evening. As the differential widens between US interest rates and rates down under there is likely to be more weakness for the Australian dollar.

For assistance in making transfers when either buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk