Category Archives: Australian Dollar Strength

Australian dollar predictions against sterling

Over the last two weeks the Australian dollar has been making inroads against the pound and GBPAUD exchange rates have plummeted 7 cents. To put this into monetary terms for any clients that are purchasing Australian dollars with pounds a 400,000 Australian dollar purchase will now cost just under an additional £10,000. However on the other hand for clients converting Australian dollars into pounds this is certainly something to smile about.

The latest minutes from the Reserve Bank of Australia gave no clear indication that the RBA will be  raising interest rates anytime soon however the minutes were seen as bullish as it is clear that the next move will be to follow the trend of other central banks and raise the base rate.

UK inflation data disappointed last week which has relieved some of the pressure the Bank of England were receiving. The Bank of England set an inflation goal of 2% and at present even with the drop, inflation sits at 2.6%. Many economists were predicting if inflation rose above 3% we would get clear direction from the Governor of the Bank of England and an interest rate hike early next year was likely. However with inflation now falling the chances of a rate hike have diminished.

Since the UK public decided to vote out of the EU, the pound has lost approximately 15% against all of the major currencies. Brexit negotiations I believe will continue to weigh down on the pound for the foreseeable future as I don’t believe a deal will be struck anytime soon in regards to the divorce settlement or the rights of EU citizens living in the UK.

Therefore for Australian dollar buyers purchasing currency on the back of a positive move would be my strategy as I do not foresee any substantial gains being made over the upcoming months. Australian dollar sellers may wish to take advantage of the 7 cent spike in their favour or should continue to monitor the market and try to covert in the 1.50s.

However Australian dollar sellers should be cautious as the National Bank of Australia believe the Australian dollar is overvalued which I actually agree with. At the moment currency investment continues to land on Australian shores due to the high interest rates.

The main data releases to look out for this week are UK GDP numbers Wednesday morning which are set to show a decline which could lead to further sterling weakness and the Federal Reserve interest rate decision Wednesday evening. It is unlikely the Fed will raise interest rates and I expect a neutral statement by Janet Yellen shortly after. This could lead to a further sell off of US dollars and the Australian dollar could benefit.

For people that are converting pounds and Australian dollars for the first time, it is essential that you get the very best exchange rates. If you have used a brokerage for many years or have been referred a brokerage I strongly recommend you compare rates to make sure you get the best price possible and therefore save money. This simple exercise takes two minutes and in the past I have saved clients hundreds and in some instances thousands of pounds.

My direct email is drl@currencies.co.uk Dayle Littlejohn. Alternatively call me Monday morning on 0044 1494 787 478 and ask the reception team to be put through to Dayle Littlejohn.

Could the Aussie make further gains vs the Pound? (Tom Holian)

The Australian Dollar has gone from strength to strength recently vs the Pound as the economic and political uncertainty caused by the Brexit continues to put the Pound under pressure.

Next week there are a number of data releases that could have a big impact on GBPAUD exchange rates. The biggest day of the week will come on Wednesday when the Reserve Bank of Australia publishes Australian inflation data.

Inflation is a key factor in a central bank’s decision when it comes to moving interest rates so this could be a big influence as to what direction the RBA moves in when it comes to moving interest rates in the future.

After inflation data the UK releases second quarter GDP data. This will cover the period of the general election as well as when the Brexit talks were officially started so I think this data will be lower than the expectation of 1.7% year on year which in my opinion could lead to the Pound falling against the Australian Dollar.

We end the day with arguably one of the biggest events of the month when the US Federal Reserve publish their latest interest rate decision. The US economy has been very strong recently and typically when the US performs well this encourages global investors to increase their attitude to risk.

The value of the Australian Dollar is often improved when the data is positive in the US so we could see a very positive day for the Australian Dollar vs the Pound during Wednesday so make sure you’re prepared if you want to take advantage of the movements for GBPAUD exchange rates.

I work for one of the UK’s longest established currency brokers and I’m able to offer you bank beating exchange rates so if you would like further 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

 

Sterling’s Woes continue (Daniel Johnson)

A question of who is worse off.

Australia is not in the greatest state. The Reserve Bank of Australia (RBA) are reluctant to making any monetary policy moves due to the problems with housing prices. Australia’s heavy reliance on the Chinese purchasing their raw materials does not bode well for a stable economy. It is almost as though Australia are reliant on China’s very respectable growth continuing, the problem is China’s growth is slipping and their are rumors some of China’s data releases are falsified. Iron ore Australia’s largest export has fell significantly in price which has caused worry among investors.

Australia’s troubles pale in comparison however compared to the UK, although I have faith the UK’s problems will be short to medium term. Unfortunately due to politicians with their own agenda the UK economy is in tatters. Inflation is far too high, not keeping up with average wage growth and house hold debt is shocking. Bordering on pre financial crisis levels witnessed in 2008. Car purchases are through the roof with loan approvals given to those who are in no position to make the payments.

The uncertainty surrounding Brexit negotiations is the main reason Sterling is so weak. until their is transparency on Britain’s stance on exit the pound has little chance of recovery.

If you are buying the Aussie with Sterling you are between a rock and a hard place. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavor to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Reserve Bank of Australia appear unhappy with ‘overvalued’ Australian Dollar, will they take action? (Joseph Wright)

The Aussie Dollar has not only gained a substantial amount of value against the Pound in recent months, but also against most other major currency pairs.

With the Reserve Bank of Australia (RBA) already suggesting that there will be no further interest rate changes this year, they now have the issue of an overvalued currency which is a negative for an economy like Australia’s due to it being so heavily export driven.

The reason the RBA is unlikely to amend the interest rate is due to fears of a heavy impact on the already overheating housing market, as making mortgages easier to come by would most likely cause even further issues for house prices down under and especially on the East coast.

The Australian Dollar is now this year’s best-performing major currency so those looking to exchange AUD into another currency should bear this in mind.

Moving forward I think there’s a chance that we could see members of the RBA attempt to jawbone the currency as they will be looking to keep Aussie exports competitive.

The Pound is coming under pressure as Brexit negotiations take place this week in Brussels, and I think there is always the chance of a update on these which could move the markets.

If you have a 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 GBPAUD rise or fall in the coming weeks?

The Australian is really benefiting from much improved certainty around the outlook on interest rates. Interest rates are a key factor in determining the relative strength and weakness of a currency and this is of vital importance for the Australian dollar. Viewed by investors as a good currency to hold because of the higher interest rates, the Australian dollar will rise in value if investors believe that interest rate will go up in the future. If you are buying Australian dollars the shorter term outlook is not great, it is likely the Aussie will make further gains. If you have a transfer to make buying or selling Australian dollars this information will be vital to the rate in the future.

The Reserve Bank of Australia confirmed that they could well be looking to raise interest rates in the future which has helped the Australian dollar to rise against the pound. The pound is actually much weaker too since Inflation has been falling in the UK at the latest release, this reduces the chance of an interest rate hike. Clients looking to buy or sell Australian dollars for pounds could see GBPAUD test closer to the 1.60 in the next few weeks but longer term it might well recover. Only two weeks ago we were headed to 1.70 so to be where we are now is a surprise in some respects. Events could quickly change again!

News that might help would be the US dollar strengthening again. The USDAUD rate is of real importance to GBPAUD since as USDAUD is the most heavily traded currency pair, the movements on US dollar to Aussie will ‘weigh’ on GBPAUD rates. So for example lately the US dollar has been weakening, this has helped the Aussie to rise which has affected GBPAUD too.

GBPAUD is on the slide but could quickly make a recovery! Every 1 or 2 cents on a big volume of currency can make a difference of thousands so if you have a transfer to consider and wish to get the best rates and help with the timing of any deal please speak to me Jonathan Watson by eamiling jmw@currencies.co.uk.

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

 

Pound to Australian Dollar exchange rates still testing lower levels (Joshua Privett)

Pound to Australian Dollar exchange rates have suffered recently, alongside the rest of the Pound’s pairings, and whilst currently sitting just above 1.64, has hit 1.62 just hours ago.

The underlying factors are there to justify the move. For one the Australian economy is enjoying an unrivalled period of sustained growth and the stability still seems there.

Just today it was reported that full-time jobs has surged to keep unemployment near four-year low, with 14,000 jobs added to the economy in June. The figures are actually stronger than they seem. Actually 62,000 full-time positions were added, whilst 48,000 temporary positions were lost (some of these becoming full-time positions and others being lost due to low tourist season).

What does this mean for rates moving forward?

With the fundamentals established for the AUD to at least maintain its value, the fortune for Australian Dollar buyers using Pounds lies in UK based developments.

We are now into the second round of the first phase of Brexit negotiations. Statements for the Eurozone state explicitly that sufficient progress has to be made here before we can address the key issue which markets are most interested in – trade.

These include the so called ‘divorce bill’, rights for citizens and the Irish border question.

The end of the first talks were formalities, this second round will be very telling at the pace talks are expected to proceed through. Productive conversations should yield greater confidence in Sterling, and the converse should lead to parallel drops.

Personally, based on how talks have progressed so far, I believe that sellers should be facing opportunities next week.

I strongly recommend that anyone with a Australian Dollar based currency requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

You can contact me directly by calling +44 1494 787 478 and asking the reception team to speak to Joshua.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant sums of money on a prospective transfer.

Could the Pound fall even further against the Australian Dollar? (Tom Holian)

Sterling has continued to struggle vs the Australian Dollar this week after the comments made by the Reserve Bank of Australia which suggested that an interest rate hike may be coming sooner than some may expect.

Growth figures in China which is the world’s second largest economy and the largest trading partner with Australia have also been very good this week which has in turn led to Australian Dollar strength vs the Pound sending exchange rates below 1.64 for the first time in many weeks.

We have the release of Australian Unemployment data due out overnight and in my opinion any further good news down under could send the Pound vs Australian Dollar rates down even further.

My next expectation for rates is towards 1.60 rather than 1.70 so if you’re thinking about selling Australian Dollars soon then keep a close eye out for what happens to the GBPAUD rate tomorrow.

Tomorrow morning also brings with it UK Retail Sales which owing to the uncertainty caused by Brexit could see a lower than expected figure and if this happens I expect further Australian Dollar strength vs the Pound.

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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

Australian Dollar continues to make gains – Will this continue? (Daniel Wright)

We have seen the Australian Dollar have a fantastic week against all major currencies following on from both positive growth figures in China and extremely hawkish comments from the RBA (Reserve Bank of Australia) that they would be more than happy to see the cash rate in Australia make its way up to 3.5%.

Any interest rate change or even just the hint of it happening can move the value of a currency, and considering that the RBA have suggested a number of hikes with these comments we have seen the Australian Dollar soar from strength to strength. When an interest rate is raised it does make that currency more attractive to investors and with the rule of supply and demand if more people are interested in buying Australian Dollars then the price will rise.

Tomorrow morning (or overnight tonight for our readers in the U.K) we have Australian unemployment figures and this has the potential to buck the trend. Expectations are for unemployment to have increased from 5.5% to 5.6% an d should this be true then this may buck the trend for the time being.

Personally  I feel this is a prime opportunity at present to sell Australian Dollars as I still do not fully believe the Australian economy is such great shape that the RBA are hinting that it is, also, although China has recently shown good data I still feel there are plenty of issues still to resolve with the huge level of borrowing happening over there.

If you have Australian Dollars to sell or indeed buy then you need to have a proactive and experienced currency broker on your side in turbulent times such as these. If you feel I could be beneficial to you then I would be more than happy to help you. You can contact me (Daniel Wright) on djw@currencies.co.uk or by calling 0044 1494 725353 and asking for me and I will be more than happy to explain the process to you and help you put together a plan of action.

Austalian dollar soars against sterling (Dayle Littlejohn)

Earlier this morning the Australian dollar spiked against sterling by over 1.5%, when the Reserve Bank of Australia released their latest minutes. Investors piled into the Australian dollar off the back of the news that the cash rate could increase to 3.5% from 1.5% and not have a negative impact, which implies the RBA could also think about raising interest rates in the months to come.

Personally I think this is a spike in the market to take advantage of for Australian dollar sellers buying pounds as I believe the Australian dollar is overvalued. This is supported by the National Australian Bank who released an article last week with similar views. With the property market being over inflated in certain major cities (especially east coast), I find it difficult to see how the RBA will alter the interest rate.

If they make the cut this will entice people to take out larger mortgages where as a hike would strengthen the Australian dollar further and in turn have a negative impact on Australian exports.

Looking further ahead Australia are set to release their latest Unemployment rates and Employment change numbers Thursday morning. Unemployment numbers are set to slightly rise therefore some of the gains we have seen this morning could be reversed.

As for the pound UK inflation is released in 30 minutes. If the figure exceeds 2.9% this could put further pressure on the Bank of England to raise interest rates and again some of the gains for sterling buyers could be lost. To find out how the inflation numbers impact the market feel free to email me and I will let you know the outcome later this morning.

If you are trading GBPAUD in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Reserve Bank of Australia Minutes Tomorrow (Ben Fletcher)

In the early hours of tomorrow morning the RBA will reveal the minutes of their latest meeting. Whenever a central bank reveals the committee’s thoughts markets can always get excited. Several countries around the globe have started to raise interest rates and the recent strength for the Australian Dollar over the last 9 months suggest Australia may be the next to hike rates.

China which is one of the key influences on the Australian economy last week released positive date and installed further confidence that things are settled. In my opinion it would not surprise me if there is a downward movement in the GBP/AUD rate tomorrow morning and may present a good time for Aussie Dollar sellers. However come tomorrow afternoon the main influence will be Bank of England Governor Mark Carney. The UK interest rate conundrum continues on and if Carney makes a hint towards a hike expect a major market movement. Tomorrow could see a good morning for the Aussie Dollar reaching a near month high followed by a return to nearly 1.70 on the GBP/AUD rate.

The end of the week may also bring AUD volatility as there will be a release of June’s unemployment figures. If these are positive expect Aussie Dollar strength, however as always anything negative or unexpected can shock the market.

When the markets are this volatile there will always be spikes and drops, making timing a transfer vital to maximise your funds. If you have any questions with my forecast above or would like to simply discuss an upcoming requirement you have please send me an email to brf@currencies.co.uk. I would be happy to share my thoughts with you and I may be able to offer a viable solution to help you complete a trade, as I have several years experience working for a brokerage