Category Archives: Australian Dollar Strength

Aussie Dollar Boosted on Comments from RBA (James Lovick)

The Australian dollar has found a small degree of support this week after Reserve Bank of Australia Governor Philip Lowe made clear that the next interest rate move is more likely to be up rather than down. The last minutes from the RBA signalled that there is unlikely to be any interest rate increase for a very long time so which actually helped see the Aussie weaken. Although the Governor’s comments don’t fundamentally change that much the markets can take it as reassurance that there is likely to be a rate rise possibly next year and this is giving the Aussie a small boost.

GBP AUD exchange rates could see an interesting day and rest of the week on the back of the budget that will be delivered by Chancellor of the Exchequer Philip Hammond today. The well broadcasted budget is likely to see considerable volatility for sterling exchange rates depending on how well it is received. Considering the Chancellor’s failed budget earlier this year he is unlikely to make any drastic changes and his hands are tied regardless as a result of Brexit uncertainty. As such GBP AUD rates are more likely to be impacted by the ongoing Brexit negotiations unless of course the Chancellor makes an epic mistake in which case his position would almost certainly be in jeopardy.

The Brexit negotiations remain deadlocked although a cabinet meeting on Monday evening seems to have unlocked more funds to be offered to Brussels with the condition being applied that the door must open to a future trade agreement. The caveat offered by the British government that nothing is agreed until all is agreed would suggest the UK could if necessary withdraw any offer of a financial settlement it makes and this will inevitable keep the pressure on sterling for the foreseeable future

At the next EU summit the EU leaders will decide if talks will move forward to trade and this is where there is likely to be substantial movement for clients looking to buy or sell Australian dollars with pounds. The summit around the 15th December in my view should see new direction for GBP AUD. Clients with pending requirements would be wise to get in touch at this stage in the run up this event to look at the options available to take the risk out of the market place and top try and maximise on any substantial changes in exchange rates. Feel free to email me James at jll@currencies.co.uk

Will GBPAUD keep on rising?

The pound to Australia dollar rate has been moving higher on the back of the latest improving economic data for the UK and fresh fears over when the RBA (Reserve Bank of Australia) will raise interest rates. We could see the Federal Reserve in the US raising rates which has been a big driver on Australian dollar exchange rates. The strengthening of the US dollar has seen a weaker Australian dollar as they are closely linked.

Any weakening of the Australian dollar lately can be partly attributed to the scaling back of interest rate expectations for the Australian economy. Overall the predictions for the Australian economy had been very strong and this had seen the Aussie stronger. This has been scaled back recently with the Aussie weakening as the RBA scaled back their forecasts.

The US dollar is also a factor as it has been rising, it is looking more than likely that the US will raise their base rate which will see the US dollar stronger. As a higher yielding currency the Australian dollar has been very popular but now the US dollar is challenging its dominance. The market is now bracing itself for lower for longer Australian interest rates which is why the currency has weakened.

with sterling finding some support this trend could continue for longer, the conditions that have created it don’t appear quite ready to subside. For now it appears this market will favour Aussie buyers and any clients looking to sell Australian dollars for pounds might need some assistance with strategy.

If you have a transfer to make buying or selling Australian dollars then please don’t hesitate to let us know so that we can monitor the market and update you on the latest strategies to be aware of in trying to maximise your transfer. If you wish for more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you.

 

 

Poor wage growth leads to Australian Dollar weakness despite better unemployment figures (Daniel Wright)

This week has been a mixed one for the Australian Dollar so far, with a fairly week start and a flatter past 24 hours.

The reason the Australian Dollar lost strength earlier in the week was due to news of slower wage growth than expected.

Wage growth yesterday came out at 0.5% against analyst’s expectations of 0.7% which is the reason why we saw Australian Dollar weakness.

Wage growth is a really important release in the current climate, if wage growth ( the increase in how much people are earning)  is a lot lower than inflation (the increase in the costs of goods and services) then you can generally expect an economy to drop off a little, as people will have less money in their pocket to spend. Bad economic data can then in turn lead to weakness for a currency, and with markets moving well in advance of an event actually happening this is why we are seeing a good opportunity to buy Australian Dollars at present.

Unemployment figures came out today and despite the fact that they actually showed an improvement, the Australian Dollar failed to make any vast improvements against most major currencies.

The rest of the week is fairly quiet but do not be fooled into thinking that the Australian Dollar will remain flat, being perceived as one of the ‘riskier’ currencies there is always the chance of movement should global attitude to risk alter.

Should you be in the position that you need to buy or sell a large amount of Australian Dollars and you would like my help along with a better exchange rate than your bank or current broker then I would love to hear from you. You can email me (Daniel Wright) personally on djw@currencies.co.uk with a brief description of what you would like to do and I will be more than happy to get in touch with you to explain how I can assist.

6 month high to buy Australian dollars with pounds!

Overnight disappointing wage growth data has seen the Australian dollar lower and taken it to a 6 month low against the pound. This is presenting the best time in 6 months to buy Australian dollars with pounds, some good news for Australian buyers. Overall the outlook for sterling remains very shaky but we could potentially see some improvements in the coming weeks if we get some clarity on the UK’s Brexit position.

If we look at the state of the pound and its more recent performance against the Australian dollar it has mainly been subject to the whims of the Brexit which has only seen the market lower. If you have a transfer to make in the coming weeks then I would suggest you look to capitalise on this improvement or to certainly be making some plans around these latest developments.

Much has been made of the status of the pound and growing concerns that the UK will ultimately raise interest rates further down the line, this has all supported the pound but sentiments can very quickly change! There is now also a belief that the UK would also get a good deal from the Brexit, personally I would be surprised to see this happen but we will have to see how things develop.

If you are looking to buy or sell the pound against the Australian dollar then making some plans in advance is a crucial part of maximising the transaction, understanding the future events that would drive exchange rates will ultimately be crucial to getting the most for your money. As well as getting the very best rates of exchange we also help with forecasting and alerts of certain market moving events and exchange rates.

For more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk. Thank you for reading and I look forward to hearing from you.

GBP AUD Rates Slide on UK Brexit Uncertainty (James Lovick)

GBP AUD exchange rates have inched lower this week as ongoing British politics continue to weigh heavy on the pound. Clients looking to buy or sell Australian dollars would be wise to look at their options very quickly as developments over the next two weeks are likely to have a very big impact on the value of sterling rates.

UK Prime Minster Theresa May and the British government are feeling the pressure this week as it has been reported that forty conservative members are prepared to sign a letter of no confidence in the Prime Minister. It would only take another 8 signatures that would force a leadership challenge and this perceived risk of a potential change of leadership is piling on the uncertainty for the pound.

The recent ultimatum from the EU giving Britain just two weeks to cough up more money in the Brexit negotiations or face a no deal situation is yet another major concern for those clients holding pounds looking to buy Australian dollars.

Any deterioration in these negotiations will likely see the pound weaken further and sterling will very much depend on progress in the next couple of weeks. If for example there is no agreement on the divorce settlement and talks break down with no deal at all then in the short term the pound could come under sizeable pressure. This is a real risk and there is every chance that this least preferred option could become a reality for all sides involved.

Consumer confidence numbers from Westpac are released later which should give some clues as to the strength of the Australian consumer. Wage price data is released on Wednesday which could help see the dollar rally if the numbers arrive better than expected. The lack of action from the Reserve Bank of Australia though is only likely to prevent the dollar from strengthening too much. The decision to maintain rates at such low levels is keeping the dollar on the back foot.

Anyone selling Australian dollars could see some excellent opportunities in the next 10 days if Brexit starts to look messy which could provide a short window of opportunity. Please feel free to contact myself James at jll@currencies.co.uk and I will be happy to take a look at your requirement and see how your transfer may be impacted by these economic and political changes.

RBA Interest rate decison (Daniel Johnson)

RBA keep Rates on hold

During the night we saw the Reserve Bank of Australia (RBA) interest rate decision. Rates were kept on hold at 1.5%, this was anticipated so id did not have a significant impact on Australian dollar value. The market moves on rumor as well as fact, volatility is created when things don’t go according to the general consensus.

Interest Rate Forecast

I would expect interest rates to remain at these levels for the foreseeable future due to the situation with the Australian housing market and Chinese growth. Housing prices in Melbourne and Sydney are well above the national average due to the higher wages being offered in the cities. This is all very well, but when you have foreign investors buying the properties unconcerned with the inflated process we are starting to see a housing bubble start to emerge. A very similar situation to London, a bubble that can not afford to burst.

There is also Australia’s heavy dependence on the Chinese to purchase their raw materials. Iron ore is Australia’s primary export and as such it’s price can influence Australian Dollar value. Despite Chinese growth still being healthy it is by no means as strong as previous years which is worrying considering Australian’s heavy reliance on the Chinese. It is wise to keep an eye on both Chinese growth data and Iron ore prices if you are considering trading Aussie.

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 

RBA leave interest rates on hold as expected (Daniel Wright)

This morning the RBA (Reserve Bank of Australia) announced that they would be leaving interest rates on hold at 1.5% which was exactly as the markets had originally expected.

The decision didn’t have a huge impact on the value of the Australian Dollar as it had been widely expected that rates will remain on hold for the coming months.

An interest rate hike is generally seen as positive for a currency and a cut in rates is seen as negative so interest rate movements can be key for a currencies strength. Even the mere mention or speculation of a hike or cut in interest rates can lead to exchange rates moving quite a lot, so any hints or change to the likelihood of a rate change may be of great importance if you have a pending exchange to carry out.

I still personally feel that the Australian Dollar may have a slightly rough patch coming up, although it does have a great backbone and constantly seems to fight back even in the toughest of times.

We have a huge amount of economic data due out in China tomorrow which will be key for where Australian Dollar exchange rates head for the rest of the week, along with Chinese inflation data on Thursday too. We have very little out from Australia over the course of the week that should impact the value of the Australian Dollar so focus will no doubt be on what the data from China brings.

Chinese data can have a large impact on the value of the Australian Dollar due to Australia’s large amount of exports to China so this data is important for anyone looking to buy or sell Australian Dollars.

If you have the need to buy or sell Australian Dollars in the coming days, weeks or months then it may be prudent to get in contact with me directly and I would be more than happy to help you.

Not only can we better rates from all major brokerages but we can also help you with the timing of your transfers, we have various contract types that we can offer from limit orders to forward contracts and can help tailor a game plan to suit you personally. Making international transfers is important and the difference from broker to broker can be thousands of Dollars. Feel free to contact me (Daniel Wright) by emailing djw@currencies.co.uk and I will be more than happy to get in touch with you personally.

Sterling to Aussie Dollar rate plunges after BoE rate hike, what happened? (Joseph Wright)

This afternoon at lunchtime the Bank of England hiked interest rates by the expected 0.25 basis points, although in the immediate aftermath the Pound fell dramatically against every major currency pair.

At the time of writing the Pound to Aussie rate has fallen by 2% with the GBPAUD rate now sitting at 1.6917 and the AUDGBP rate sitting at 0.5910.

This afternoons move has come as a surprise to the markets, as usually when the base rate increases the underlying currency climbs. The opposite has happened today though as it appears that prior to the move by the Bank of England the hike was priced into the market, and the commentary afterwards was a bit more bearish than the Sterling bulls had hoped for.

It’s looking like there won’t be a particularly aggressive approach from the Bank of England regarding monetary policy moving forward, which is why we’ve seen the Pound lose so much value in such a short space of time.

There won’t be any further major economic announcements out of the UK tomorrow that are likely to move markets to such a great extent, although Australian Retail Sales data is coming out in the early hours of this morning which may impact the rates.

If you wish to be kept updated regarding any other short-term price movements between the pair, do feel free to register your interest with me. Moves such as today’s can result in large differences in a currency transfer outcome so being aware of these moves can be highly beneficial.

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.

 

 

Political issues in Australia may weigh on the Australian Dollar (Daniel Wright)

We have recently seen a number of resignations from MP’s in Australia due to the issue with dual nationality which has caused a little political uncertainty, generally seen as negative for a currency.

This current issue surrounds a constitutional law from 1901 that anyone holding a duel nationality is unable to serve in the House of Representatives. It appears that numerous MP’s had no idea about this need, hence the fact some have now been caught out. There is now growing pressure on the Australian Government to carry out checks on at least another 200 members to ensure they do not fall foul of this too. Any further news of more resignations coming may add weight to the pressure on the Australian Dollar, leading it to get a little weaker.

There are four main factors that can impact the strength of a currency, these are economic stability, political certainty, acts of terror and acts of god and political problems can lead to weakness for a currency, just as much as economic issues can too.

Today will be important for anyone looking to buy or sell Sterling against the Australian Dollar, as we have the latest Bank of England interest rate decision in the U.K where the Bank of England are expected to look at raising interest rates by 0.25%.

Should this happen then the Pound may gain a little value against the Australian Dollar, although we may have seen much of this movement priced in over the past week or so. Be aware that if the BOE do not hike rates, or should they hike with 0.25% but release fairly negative comments about future hikes then we may see a drop off in the value of Sterling, making Australian Dollars more expensive to buy with the Pound.

If you have the need to buy or sell Australian Dollars against any major currency then it may be prudent to contact me directly, generally I will be able to save you money on your exchange rates both by getting you a better rate than your current broker and by assisting you with market information so that you have help with the timing of your transaction.

If you would like my assistance then please do feel free to get in touch with me directly by emailing djw@currencies.co.uk and I will be more than happy to contact you personally.

Will GBPAUD keep rising?

GBPAUD has broken through fresh highs touching the best rates since May to buy Australian dollars with pounds. This is presenting an excellent opportunity that could shift dramatically in the next 24 hours as the UK sees its latest UK interest rate decision. The decision tomorrow is going to be the biggest short term driver on GBPAUD rates and any clients looking to buy or sell should be preparing for movement.

The rates have been rising as the pound strengthens on the back of expectations the Bank of England will raise interest rates tomorrow. The Aussie dollar too has been weaker on the basis of a much longer time before the Reserve Bank of Australia raise their interest rate. Investors had previously been anticipating the interest rates would be hiked sooner by the RBA, perhaps in 2018.

This has seen the Australian dollar weaker as investors who had previously taken up positions believing the Aussie will strengthen now seek higher returns elsewhere. The Australian economy is one of the worlds strongest having remained fairly immune from the concerns and fears that have blighted other global leaders.

The outlook remains positive for the Australian dollar which could well see the currency stronger for longer, overall I would not be looking for a much weaker AUD longer term, I therefore feel if you need to buy Australian dollars with pounds, that locking in something on this spike is very sensible. Otherwise tomorrow’s UK Bank of England decision is the key news for the pound that would see rates changing.

If you have a transfer buying or selling Australian dollars making plans around crucial events is key. I would expect the GBPAUD rate could rise as high as 1.75 but drop as low as 1.68 if the Bank of England fail to meet with expectations.

If there is anything you wish to run through or discuss please don’t hesitate to let me know by emailing jmw@currencies.co.uk.