Category Archives: Australian Dollar Strength

RBA Interest Rate Forecast vital to AUD value (Daniel Johnson)

NAB predict Rate Hike as early as August

The National Australia Bank (NAB) has a very optimistic forecast in regards to rate hikes by the Reserve Bank of Australia (RBA). They are a minority. They are of the opinion we could see an interest rate hike by 0.25 basus points as early as August.

“The RBA has indicated that it is in no rush to raise rates in lock-step with global central bank counterparts. However, lower unemployment, and evidence of wages growth moving upwards — even gradually — should be enough to give the RBA confidence that inflation will eventually lift above the bottom of the band,” said Alan Oster, NAB Chief Economist.

“We continue to forecast two 25 basis point rate hikes in August and November, although acknowledge the risks are that these hikes could be delayed.”
Oster attached a couple of warnings which could change the RBA’s decision, noting that a slowing in household credit and house prices due to macro-prudential measures implemented by APRA “may help alleviate some concerns about household debt”.He continued “higher AUD may also threaten this outlook although our revised forecasts are for the currency to be 75 US cents by year end”.

Personally I do not share his view. I think a hike by August is very optimistic and economic data is not consistent enough to warrant a hike . Inflation is some way from where it needs to be and there is no reason to suggest there will be a rapid rise between now and August. This a viewpoint shared by the man that counts. RBA Governor, Philip Lowe who recently stated the following.

“further progress in reducing unemployment and having inflation return to the midpoint of the target range”, adding that it was “likely that the next move in interest rates in Australia will be up, not down”.

He also said “while we do expect steady progress, that progress is likely to be only gradual.

The general consensus is there will not be a rate hike until at least early 2019.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

Australian Dollar Holds Steady after Unemployment Data (James Lovick)

The Australian dollar is still seeing an uncertain period with so many factors globally influencing the exchange rate. Overnight has seen unemployment data released which has held firm at 5.5% as expected. The Reserve bank of Australia are paying close attention to the labour market at the moment and are keeping a very close eye on the amount of wage growth down under, something all the central banks are monitoring closely. When wage growth begins to rise it will be a reason for the RBA to raise interest rates although for the moment the figures are still sufficiently weak to make the case for no changes to interest rates.

The RBA minutes from the last meeting will be released next week and will reveal what the central banks thinking from the last meeting. Any suggestion that the RBA will look to raise rates this year and follow in the US Fed’s footsteps could see the Aussie gain although it is my understanding that they are more likely to monitor the situation in light of all the recent volatility in the financial markets. Those clients looking to sell Australian dollars hoping for a move back to 1.70 might have a good while longer to wait.

Clients looking to buy Australian dollars are seeing a good opportunity to buy although the recent rally in the price of sterling has slowed down in the last week with rates coming off the recent highs. The pound is likely to see a lot of volatility in the coming weeks coming from the political arena. There are a series of speeches to be made by British politicians within the British government which should offer more clues as to where Brexit will end up.

UK Prime Minister Theresa May will be in Germany tomorrow and she is likely to make a statement either on Friday or Saturday. If we go back to the Lancaster House speech back in 2017 the pound rallied by almost 2% following the speech and so it should not be underestimated how much the sterling markets could move if more detail over Brexit is offered.

To discuss your requirement and how these events are likely to impact on your own requirement then please get in touch with me at jll@currencies.co.uk

Will the Pound to Aussie Dollar rate recover back to pre-Brexit levels anytime soon? (Joseph Wright)

There has been a 1 and a half cent difference between the high and low for GBP/AUD today, as the pair appear to be continuing to decide which direction to move in next.

Sterling has performed in a mixed fashion against the majority of major currency pairs today and I think the economic data released this morning is perhaps one of the reasons for this.

This morning the office for national statistics (ONS) reported that annualised UK Inflation figures for January showed 3%, justifying the Bank of England’s concerns regarding the rising rates of inflation. This was above the expectation of 2.9% and and considerably above the BoE’s 2% inflationary target figure.

The potential for another rate hike from the BoE is now more realistic, and with wage growth now beginning to show signs of an improvement I think there is a chance of it happening this year which is why the pound has been climbing.

GBP/AUD is currently just under 1.80, and if the pair breach this key level I can imagine seeing the rate break through into the 1.80’s even if it’s proving a stubborn barrier up until this point. A move towards 2.00 would be back to pre-Brexit levels, and should AUD continue to weaken I think seeing GBP/AUD closer to this mark sometime throughout 2018 isn’t something to be ruled out.

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.

Consumer confidence and unemployment the key data over the coming days

Tomorrow we have the release of the Westpac Consumer Confidence reading, Consumer Confidence is a measure of sentiment that individuals have in economic activity, and is a really good overview of how the general consumer is feeling about their economic situation. A higher reading would be good for the Australian Dollar as it suggests that Consumers may be ready to spend more, and a lower reading would usually weaken the Australian Dollar as it suggests that people have less disposable income in their pocket to spend on goods and services.

On Thursday we will also see the release of unemployment figures for Australia, with expectations of unemployment to have dropped from 5.5% to 5.3% which would be a strong figure. The RBA (Reserve Bank of Australia) had lowered their unemployment expectations recently to 5.25% for the year ending June 2018 so this figure would fall in line with the RBA’s predictions and may give the Australian Dollar a good solid Thursday should this come out as predicted.

For those with a currency exchange to carry out involving the Australian Dollar in the coming days, weeks or months you must also be wary that the figure may come out worse than expected, for example should the figure remain at 5.5% or only come down to 5.4% then we may witness Australian Dollar weakness as we head towards the end of the trading week.

We do have a flurry of inflation data out tomorrow afternoon from the U.S which can impact Australian Dollar rates due to the flow between the Australian Dollar and U.S Dollar, anything positive for the U.S can generally weaken the Australian Dollar at present, as it heightens the chance of an interest rate hike in the States.

If you need to carry out a currency exchange involving the Australian Dollar and you want to achieve the best rate of exchange, along with help on timing your transfer. You are welcome to contact me (Daniel Wright) the creator of this site on djw@currencies.co.uk and i will be more than happy to speak with you personally to help with your situation.

Inflation to influence GBPAUD exchange rates

Tomorrow morning the UK will release their latest inflation numbers and a slight fall is to be expected. Normally a slight fall would lead to a weakening pound however I expect a fall in inflation could strengthen the pounds position against the Australian dollar. My reasoning is that the Bank of England last week announced they expect inflation to fall and wage growth to rise, which will lead to an interest rate hike. The release is at 9.30am for further information in regards to the inflation release feel free to email me on drl@currencies.co.uk.

Later in the week (Wednesday) Boris Johnson is set to address the public in regards to Brexit. The aim of the speech is to unite remain and leave voters. Past history leads me to think that Mr Johnson may go off topic, especially if he is asked about Michel Barnier’s comments last week. For clients buying Australian dollars with pounds, I would be tempted to take advantage after the inflation numbers and not wait for Mr Johnson’s speech.

Economic data releases are thin for Australia until Thursday at 1.30am in the morning. Unemployment and employment change numbers are to be released. Unemployment numbers are set to fall to 5.3%, which is fantastic for the Australian economy. Employment change numbers are set to show a slight decline however I expect the Unemployment numbers to outweigh the employment change numbers, therefore I expect a positive morning for the Australian dollar.

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.

Brexit jitters causes the Pound to fall against the Australian Dollar (Tom Holian)

In what has been a very volatile week on global stock indices the GBPAUD exchange rate has started to move in a negative direction during the course of trading on Friday.

After touching close to 1.80 against the Aussie Dollar on Thursday the gains have now been eroded.

The Pound rallied on Thursday afternoon following the Bank of England’s latest interest rate announcement.

Although the central bank kept rates on hold there is now an increased chance that a rate hike now may come as early as May.

UK growth forecasts for both this year and next were raised which gave the Pound a real boost against the Australian Dollar.

However, since early on Friday morning the Pound has once again started to fall against the Australian Dollar.

UK Trade Balance figures showed a decline on Friday morning and combined with comments from EU Chief Negotiator Michel Barnier this led the Pound to decline against all major currencies.

Barnier suggested that the transitional period which takes place between March 2019 and December 2020 is far from getting resolved which could cause problems for the UK when it next meets in March to discuss phase 2 of the Brexit negotiations which are to be focused on future trade agreements.

The Irish border issue appeared to be sorted back in December but now this could raise issues with the movement across the border and the uncertainty has caused the Pound to fall.

As we go into next week the UK releases its latest set of inflation data predicted to come out at 2.9%. With inflation continuing to remain high if we see the data come out the same or higher than expected this could see the Pound make a recovery as it provides further support for a future interest rate hike.

If you have a need to buy or sell Australian Dollars in the near future then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. 

Having worked for one of the UK’s leading currency brokers since 2003 you can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

 

BOE comments causes Sterling Spike (Daniel Johnson)

GBP/AUD – In Depth

Sterling has struggled against the Aussie following the decision to hold a referendum to leave the EU. GBP/AUD sat above 2.20 pre referendum and of late has been mired in the 1.70s. We have seen a recent spike for Sterling which can be atributed to several contributing factors.

Although there was a recent surge in retail sales figures from down under the spike for the Australain Dollar did not last long, as predicted it was an an anomamly that could be put down to Black Friday sales and the release of the iphone X.

Since then the Reserve Bank of Australia (RBA) have indicated that they will keep interest rates on hold for the considerable future the Aussie has lost value. This can be justified due to the infalted property prices in high wage growth areas. Foreign investors are willing  to pay these prices as investments but it is causing the locals to struggle spending the majority of their funds on neccesities rather than luxury goods. This does not bode well for the Aussie.

The recent surge to 1.79 was caused by hints from the Bank of England (BOE) there could be a rate hike as early as May 2018. The market moves on rumour as well as fact and investors bit.

It is important not to have too high expectations if you are an AUD buyer however, the uncertainty surrounding phase two of Brexit talks has the potential to hurt the pound. Davis and Barnier are far from being on the same hymn sheet.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

 

Could we be headed for further AUD weakness? (Daniel Johnson)

RBA to keep interest rates on hold

Things do not bode well for the Australian Dollar at present. The Reserve Bank of Australia (RBA) have recently indicated that interest rates will be kept on hold for the foreseeable future. It was following Australian inflation data in the final quarter of 2017. There was a slight increase, but it did not meet the expectation of 2%. Some could deem this as positive, but the problem is due to the inconsistencies regionally.

Canberra, Melbourne and Sydney saw inflation hit over 2.1%, but if you look at Perth an area heavily involved in commodity exports inflation is struggling at 0.8%. This is definitely a cause for concern which is the reasoning behind keeping interest rates on hold.

The housing bubble created by those flocking to high wage growth areas is also a problem. The housing market remains strong in the east but is considerably down in the west according to the latest CPI figures.

With Australia highly dependent on raw material export to China it is important to keep an eye on Chinese data. We recently saw a fall in manufacturing data which has also caused Australian Dollar weakness.

GBP/AUD

GBP/AUD now sits above 1.75 which has been a resistance point of late. With the uncertainty surrounding Brexit talks if I was selling Sterling I would consider taking advantage of current levels. The last time we saw GBP/AUD near 1.80 there was a quick retraction possibly due to profit taking.

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

 

FED interest rate decision to impact Australian dollar exchange rates

This evening the Federal Reserve (United States Central Bank) will release their latest interest rate decision and for the last time Chairlady of the FED Janet Yellen will give her last press conference as Chair. For clients that are buying or selling Australian dollar it’s important to understand that decisions made in the US have a direct impact on Australian dollar exchange rates.

In recent weeks most major currencies have benefited from the demise in the US. President Donald Trump at present is trying to pull the US out of NAFTA which is the trade agreement between the US, Mexico and Canada. These negotiations are on going and could take 12 months. Nevertheless the US dollar has lost value and the Australian dollar has benefited.

The FED decision tonight could indicate whether the UK will raise interest 3 times this like predicted at the beginning of the year or if forecasts have changed. Personally I expect this release to weaken the US dollar further which could benefit most G10 currencies. Later in the week Non farm payroll numbers, which is the amount of jobs created in the US will be released at 1.30pm and this release could also have an impact on exchange rates.

The next key data release to look out for in regards to the Australian economy is the interest rate decision on the 6th. Inflation numbers showed a slight improvement in January, however the Reserve Bank of Australia are unlikely to hint towards any rate hike anytime sooner. Therefore I don’t expect this event to help provide strength for the Australian dollar.

If you are buying or selling Australian dollar 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! **

 

 

GBP AUD Hits Resistance at 1.75 (James Lovick)

The Australian dollar remains set for an uncertain and volatile 2018 which will be heavily dependent on interest rate policy from the Reserve Bank of Australia (RBA) and also the US Federal Reserve. For the moment the Australian dollar has been boosted on the back of a weaker US dollar with political uncertainty and the recent government shutdown. The underlying question is how keen the RBA will be to raise interest rates this year. If the US Fed hikes 2-3 times this year as forecast then the RBA will need to carefully decide how it follows.

As things stand there is an expectation that the RBA will seek to raise interest rates in June 2018 but if the difference in rates between the US and Australia widens too much then the Australian dollar could come under some selling pressure. For the moment the future outlook on interest rates is less clear which is likely to result in considerable volatility for the Aussie as more direction from the RBA is offered. The RBA are likely to favour a weaker currency to help its export markets so the central bank may be keen to take a more relaxed view on events in the US and not rush to tighten policy. The Aussie could see a gradual weakening as the US raise interest rates in the Spring.

The US debt ceiling is expected to be reached sometime in March 2018. This is likely to be a political animal and finding agreement to extend could prove difficult. The Aussie could see material gains around this period and so clients looking to sell Australian dollars may wish to try and find an opportunity around this period.

Australian inflation data is released tomorrow and will be keenly observed by the RBA. A higher number could help see the pound rally.

GBP AUD

Clients looking to buy Australian dollars with pounds have seen a good window of opportunity in the last week although the pound is struggling to climb much higher having broken through 1.75 last week. The mood on Brexit appears to be slightly more optimistic but even now in the second round of negotiations which commenced on Monday there is still much ambiguity. Discussion currently surround the so called transitional arrangement which so far appear less thorny.

However there could be complications and disagreement when it comes to the terms of the future trade agreement between Britain and the EU. Any souring of mood could see a sharp fall in the price of sterling and I would expect to see a number of drops in sterling as a direct result of these negotiations in the coming months. Buyers should be a particularly careful as it wouldn’t take much to see a sudden drop in the price of sterling.

To discuss your requirement and how to maximise on the rates of exchange as they become available please feel free to get in touch with me James at jll@curencies.co.uk