Category Archives: Australian Dollar Strength

Australian Dollar getting shaky due to a number of factors (Daniel Wright)

The Australian Dollar is starting to feel the pinch a little in recent trading as a number of factors are leading to a little Australian Dollar weakness.

This week so far has already given us the news that China has had a credit rating downgrade by rating’s agency Moody’s due to concerns of the spiralling debt situation over there. On top of this, investors are rushing to second guess when we will see the next interest rate change over in America and this will also be of key importance to the Australian Dollar too.

Why the rate change is so important is due to where investors will seek to hold their funds. At present Australia presents a solid interest rate compared to many other parts of the world however the U.S are slowly catching up and this is when risk perception will come into play. The closer the U.S interest rate gets to the Australian interest rate you will start to see a flow of money leaving the Australian Dollar and moving into the U.S Dollar as investors will feel that the U.S is a more stable and safer bet for their funds, so they will feel more comfortable folding funds in USD if interest rates are fairly close if not the same.

Regarding the issue with China, any bad news from China tends to be negative for the Australian Dollar as Australia exports so many goods to China so it will have an impact on the Australian economy eventually. Rising debt in China has been a concern for a long time and personally I would not be overly surprised to see Chinese debt hit the headlines on a larger scale again soon.

With this in mind we may see a tricky period for the Australian Dollar come up so there could be some great opportunities for anyone looking to buy Australian Dollars in the near future.

If you are looking to buy or sell Australian Dollars and you would like my assistance then feel free to contact me (Daniel Wright) personally on djw@currencies.co.uk and I will be more than happy to help you. Not only can the company I work for offer highly competitive rates of exchange but we are also extremely proactive in helping our clients with the timing of their exchange. If you feel you are not getting this assistance with your current broker or indeed your bank then feel free to email me directly and I will be more than happy to get in touch.

 

Will the issues surrounding the Australian property market weaken AUD further? (Joseph Wright)

The Pound to Australian Dollar exchange rate hit 1.7430 at it’s highest point during today’s session, although at the time of writing the Pound appears to have lost all of today’s earlier gains.

It’s difficult to tell which way the rate will move next, although I think that it will be underlying weakness that results in the next big move for the GBP/AUD pair as both currencies are coming under pressure for differing reasons.

China was downgraded by Moody’s (a credit rating agency) for the first time in 30 years due to slowing growth in the region although markets haven’t overreacted as a slowing in growth was inevitable.

This could spell bad news for the Aussie Dollar moving forward due to the interconnected economies (Australia and China) being quite reliant on each other. At the same time further talk of the property markets in Sydney and Melbourne overheating are surfacing again, and with a slowdown in the construction sector down under becoming a talking point as well I think there could be issues for AUD later down the line.

The Pound has also come under pressure due to the terrorist attack earlier this week, and with the election just around the corner we could see further headwinds for the Pound as we get closer to the election date (the 8th of June).

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.

Will the pound to Australian dollar rate rise or fall on the UK election?

Most reports suggest the pound is likely to rise if Theresa May wins a strong majority in the UK election on June 8th. Potentially this could see GBPAUD busting through the 1.80 level but there are of course never any guarantees with the currency markets! I am of the impression that expectations for sterling have actually been set too high and I wouldn’t be surprised to see the pound coming under pressure. I do actually feel the 1.70 level could be in focus and that after a few tricky weeks for AUD sellers the trend will now actually favour selling AUD for sterling, although of course we are unlikely to see a return to quite the same rates as we had earlier in the year.

The polls currently show Labour winning many more seats than previously expected which would see the Tory majority increase but not perhaps by as much as many believed some weeks ago. The general impression is of course a Tory and Theresa May win but, with the market pricing in a larger Tory win than expected the risk to me is to the downside, ie sterling could fall.

If you have a transfer to consider in the future then making some plans around this historic event is clear wise. We are here to help with an exchange rate I am positive will save you money over other options but also offer support and information for any transfer you might be planning. Understanding how the banks operate and the processes involved to transfer funds can save you lots of time and hassle.

My name is Jonathan Watson and I have worked as a specialist currency broker for close to ten years. If you need to move money overseas I am very confident a conversation with me will help provide some insight and could well save you thousands through a better rate and information on when to execute any transaction.

For more information at no cost or obligation please speak to me directly by emailing jmw@currencies.co.uk briefly outlining your position and preferably providing a contact number to discuss your position through thoroughly.

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

UK Mourns Terror Attack – AUD Market Update (Matthew Vassallo)

The UK is in mourning once again following last night’s horrific terror attack in Manchester, the worst on these shores since the London bombings.

Our thoughts and prayers are with the families of the victims involved, with the UK needing to pull together in times of such adversity.

The markets have just started to react following the disaster and as the trading day gets underway, the Pound still finds itself under pressure against the AUD.

GBP/AUD rates have dropped to 1.73, with the AUD benefiting from Sterling’s downfall. In truth, the Pound was struggling for much of yesterday, having made inroads against the AUD last week.

Sterling had threatened to make a move to 1.80, as the Pound found plenty of market support before hitting resistance under this key threshold. This negative trend was intensified yesterday, with reports surfacing that Brexit negotiations have already hit a wall already.

The UK have said they are willing to step away from negotiations, which backs up the Prime Minsters tag line that “no deal is better than a bad deal”.

The AUD gained almost two cents at yesterday’s high and the question now is whether this trend is likely to continue over the coming days?

I have continually advocated that clients look for short-term opportunities in the current market and the recent downturn is testament to this.

No one can predict exactly how a currency pair will evolve but with so much uncertainty surrounding the UK, in regards to what deal we will negotiate in our exit from the EU and upcoming general election, now is not the time to be gambling on a consistent upward trend for Sterling.

Similarly, the AUD itself is struggling again a backdrop of uncertainty. Iron Ore (Australia’s largest export) prices have fallen sharply, which is bad news for commodity and export economies such as Australia’s. The reasons attributed to this fall was put down to recent oversupply but with China’s (Australia’s main purchaser of iron ore) economy clouded in mystery, there are many variables to consider and the AUD has lost investor confidence as a result.

Whilst the current malaise is likely to restrict any major advancements for the AUD, as I’ve already alluded to investor confidence in the UK economy and the Pound, is fragile at best.

Client should look to protect their upcoming currency transfer by way of a forward contract wherever feasible and be realistic with any rates they are targeting in the current market.

If you have an upcoming GBP or AUD currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk.

Pound to Aussie Dollar rate continues to fall over UK economic outlook concerns, will the downward trend continue? (Joseph Wright)

The Pound to Aussie Dollar exchange rate fell into the 1.73’s earlier today as the downward pressure upon the Pound continued.

Despite still trading in the 1.70’s the GBP/AUD pair has fallen from its 8-month high as the currency is falling against all major currency pairs, with the drop against some currencies being steeper than others with GBP/EUR’s fall down to a 5-week low bring one of the standout movers.

The main reason for the softening to Sterling’s value can be attributed to the Inflation rate within the UK and its knock on effects.

The rate of Inflation has risen to its highest level since September 2013 and this is significant as it’s come at a time when UK wage growth is stagnating. Inflation is growing at a higher rate than wage growth which is likely to negatively impact consumer spending within the UK, which is an important aspect of the UK economy.

This situation looks gloomy for the Pound moving forward as the Bank of England has ruled out a rate hike in the short term future, especially with a general election just around the corner.

I wouldn’t be surprised to see the GBP/AUD rate dip below 1.70 in the short term future, unless there’s a reversal in the steep rise of living costs within the UK.

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.

Where next for GBPAUD currency rates?

The Reserve Bank of Australia released their latest meeting minutes last night which showed no real change in their views on the economy or interest rates. They appear to be stuck in a familiar holding pattern with no large expectations of a move in one direction or the other. The general impression is longer term we will see the interest rates begin to rise down under but it doesn’t appear to be on the cards just yet. If you are looking to buy Australian dollars we could see some big improvements around the time of the UK election but of course there are no guarantees, we could easily see the pound lower if Theresa May doesn’t fulfill the high expectations!

If you need to buy Australian dollars with pounds then we are close to the best rates in 2017 with the possibility of rates improving further. I personally believe sterling will come under pressure in the run up to the UK election before rising after. If you have a transfer buying the Australian dollar moving on this improvement or after the election is I believe sensible. And for those selling Australian dollars to buy pounds the opposite is true. You could be looking at quite a unique opportunity to buy the currency from both angles in the next four weeks, being prepared for the movements is key!

If you have a transfer to make buying or selling Australian dollars in the coming weeks making plans in advance is sensible to try and navigate the volatility. We are in for a truly tricky period where rates could suddenly move a good few cents. As we often say when the Aussie moves it doesn’t just move a couple of cents it can move 5-10 cents in a short space of time, just like happened recently.

For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk to get a full overview of your position and all of the ins and outs of transferring funds internationally. We are here to help with the planning and execution of any deals you will need to make sure you don’t miss out should events take an unexpected turn.

 

Buying Australian Dollar exchange rates see slight dip to end the week (Joshua Privett)

Buying Australian Dollar exchange rates have dipped away from their recent 7 month highs thanks to some lacklustre economic and wage growth forecasts for the UK economy.

The Bank of England downgraded UK growth forecasts down to 1.9% for the year, below the magic 2% mark, and made concerning noises about future interest rate rises being delayed.

The UK defying market expectations from the shock of the Brexit is one feature that has been propping up the Pound’s value. Whenever the dent is put in this picture the Pound is likely to suffer.

Unfortunately this has been coupled with a stronger Australian Dollar. A byproduct of a weakening US Dollar in the face of Donald Trump’s latest scandal which we do not need to go into detail on.

For now, the key point for anyone with an Australian Dollar interest is that, given there is little expected news this week, this dominant narrative of a dented Pound and an Australian Dollar benefitting from lost investor interest in the US Dollar should continue.

Later on this month, based on trends from the 2015 election, the upcoming 2017 election will begin to change the market trend.

Anyone who has the time to wait for UK election polling to begin to influence Sterling’s value as we get within throwing distance of polling day, should contact me to discuss a strategy on how to approach the vote to secure any targetted peaks and ensure you are better protected from any downside risk.

Otherwise, I strongly recommend contacting me on Monday if your time period means you need to secure an exchange rate before May 20th.

I have never had an issue securing more commercial exchange rates than what is on offer elsewhere due to the multiple counterparties I buy through. Contact me over the weekend on jjp@currencies.co.uk while markets are closed for a short discussion concerning your personal situation.

Will the Pound recover its losses against the Australian Dollar? (Tom Holian)

The Pound has ended the week with two consecutive days of falls vs the Australian Dollar after a difficult day of UK economic data on Thursday.

The Quarterly Inflation Report showed that inflation is predicted to hit 2.8% with average earnings hitting just 2%. Therefore, this means that the cost of living is rising whilst wages are falling.

This led to the Pound falling against the Australian Dollar after making consistent gains for a number of weeks. Indeed, compared to a month ago when rates were struggling to break past 1.60 we have now seen GBPAUD rates trade as high as 1.77 during the course of this week.

However, it appears at least for the moment that the positive run for Sterling vs the Australian Dollar has now come to an end.

On Tuesday the Reserve Bank of Australia will release their latest minutes from their previous meeting.

With the central bank having kept interest rates on hold for the 9th consecutive month recently I think we could see a small weakening for the Aussie Dollar vs the Pound if the RBA confirm that there is little appetite for any change in interest rates.

During this month with the Tories set to dominate the general election I think this could result in further stability for the UK which in turn could help the Pound challenge towards 1.80 to buy Australian Dollars.

Having worked in the foreign exchange industry since for almost 15 years for one of the UK’s leading currency brokers I am confident that not only can I save you money on exchange rates compared to using your own bank  but also help you with various options including forward contracts which allow you to fix an exchange rate for a future date for a small deposit.

To find out more information or a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

Inflation a worry for Sterling (Daniel Johnson)

Snap Election causes pound strength

We have seen Sterling make considerable gains against the Australian Dollar of late. One of the main catalysts was Theresa May’s announcement that an election is to be held on 8th June. Historically a snap election has weakened the currency in  question, however on this occasion the opposite occurred. It was a shrewd move from the PM to call for an election while the opposition is so weak. The conservatives are some distance in front in the polls and are highly likely to win the election. A conservative victory is considered to be the safe bet for the UK economy, this caused a boost in investor confidence and in turn the pound. The market moves on rumour as well as fact and I am of the opinion a conservative victory is already factored into current GBP/AUD levels.

Iron Ore price causes Australian Dollar to fall in value

Another cause for the fall in Australian Dollar value is the drop in price of Iron ore. Iron ore is Australia’s largest raw material export. The price in iron ore has fallen considerably and is having a significant effect on the value of the Australian Dollar. Australia are heavily dependent on the Chinese and Chinese growth is dwindling, which is hurting the Aussie. Keep a close eye on Iron ore prices if you have a requirement involving the Australian Dollar as this could have significant bearing on your return.

Inflation a big concern for the pound

Yesterday, we saw inflation data released in the UK. There has been a rise in inflation, usually this would be deemed as positive for the economy but in this instance it is worrying. The rise in inflation is caused by the weak value of the pound. Retailers are paying more for their imported products and are now shifting the increase in price on to consumers. Wage growth is not keeping up with inflation so this could warrant consumers to stop spending. I stated this could be a problem in blogs months earlier, keep an eye on inflation levels moving forward as this could be a major stumbling block for the pound.

If you have a currency transfer to carry out in the coming days, weeks or months then you are welcome to speak to me directly. 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  come to buy your currency. A minor improvement in a rate of exchange can make a considerable difference so for the sake of taking two minutes to email me you may save yourself hundreds if not thousands of Pounds. I can be contacted at dcj@currencies.co.uk. Thank you for reading.

Was today a blip for the Pound vs the Australian Dollar? (Tom Holian)

For the first time recently Sterling has fallen against the Australian Dollar as the positive movement for the Pound seems to have been halted in its tracks. This has provided Australian Dollar sellers with a respite and a good opportunity compared to the last few days.

The Bank of England kept interest rates on hold earlier today which came as no surprise but the central bank has announced a cut in the growth forecast.

The Quarterly Inflation Report suggested that inflation would hit 2.8% whilst average earnings would hit 2% and this caused investors to sell off Sterling which has led to a 2 cent drop from the high to low between the Pound and the Australian Dollar.

We end the week with some Chinese data overnight and arguably more importantly US inflation data tomorrow afternoon.

With the US economy having been struggling with growth recently it will be interesting to see what happens with with tomorrow’s release. In recent weeks the negative data in the US has shown problems for commodity based currencies and this is why we have seen such a large movement in Sterling’s favour vs the Australian Dollar.

The other reason for Sterling’s gains over the last month is that things are looking more politically stable in the UK with the Conservatives appearing to be unchallenged at the moment. The stability of having another term of the same government has helped to strengthen the Pound vs the Australian Dollar.

Although today the Pound has fallen vs the Australian Dollar I think we could see the Pound challenge 1.80 at some point in the run up to next month’s election.

If you have an upcoming currency requirement and would like further information or free quote when converting Australian Dollars then contact me directly and I look forward to hearing form you.

Tom Holian teh@currencies.co.uk