Category Archives: Australian Dollar Strength

Australian Growth data causes Investor Concern (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian Dollar has suffered of late due to several contributing factors. The most significant catalyst for the fall in Australian Dollar value is the US/China trade war. Australia is heavily reliant on China purchasing it’s goods and due to this any slow down in growth in China will have an impact on the Australian Dollar.

The Trump administration has placed significant tariffs on Chinese goods and China has retaliated with it’s own tariffs. The trade war is set to escalate and could be ongoing which does not bode well for the Aussie. Iron ore is Australia’s primary export to China and at present demand remains healthy which is good news for the Aussie, that is not to say this situation will last however.

Due to global economic uncertainty investors are choosing to shy away from riskier commodity based currencies such as AUD in favour of safe haven currencies such as the Swiss Franc and the US Dollar.

There are economic problems down under such as consumer spending and the cost of living in high wage growth areas such as Sydney and Melbourne. The Reserve Bank of Australia (RBA) took the decision to cut interest rates this month to 1.25% and there is the potential for further cuts.

The Australian economy is growing at its slowest rate in almost a decade, which has fuelled speculation surrounding how long Australia will sustain its run of over 27 years without a recession.

Despite the situation down under I believe the  problems in the UK outweigh that of those down under. We currently have no PM and are in complete Brexit limbo. If Boris gets in the probability of a no deal could increase as he will be using this scenario as a bargaining chip to get a better deal from Brussels. A no deal is the investors worst fear and has the potential to cause further woes for Sterling.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

US/China Trade Wars hurt the Australian Dollar (Daniel Johnson)

Australian Dollar hit by Trade Wars

In times of global economic uncertainty, commodity-based currencies such as the Australian Dollar usually struggle as investors seek safe haven investments for their money. Due to this the Australian Dollar has come under pressure lately due to the trade war between the US and China.

Australia has a heavy reliance on China purchasing it’s exports and as such any fall in Chinese growth has a knock on effect on the Aussie.  There has been steep fall  in Chinese trade activity for last month caused by the ongoing trade impasse with the United States.

Could there be further rate cuts from the RBA?

Another factor in the value of AUD has been the Reserve Bank of Australia’s (RBA) decision to cut interest rates to a record low of 1.25% earlier this year. This was an attempt to boost inflation towards the RBA’s target level of 2-3%. Based on comments from RBA members earlier this year there are predictions in the press that we could  see  more rate cuts later this year. This has the probability to weaken the Australian Dollar.

Those with an Australian Dollar requirement should keep an eye out for Australian employment data due out in the early hours of Thursday. Unemployment has risen in Australia of late, which was a contributing factor in the RBA’s recent rate cut, and if this is reflected yet again in May’s figures then the Aussie could lose value.

Comments from any RBA members following this data release could give an insight to monetary policy moving forward could therefore have an impact on the Australian Dollar.

Australia’s problems do not have the same weight as those of the UK’s, with no Prime Minister and Brexit in limbo, the Pound could be set for further losses, with the majority of candidates up for Tory leader ready to bring a ‘no deal’ back to the table. I expect Sterling to remain fragile for the foreseeable future.

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 minutes 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 18 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.

May’s future in doubt (Daniel Johnson)

Pound to Australian Dollar Forecast

Sterling has suffered of late due to the current situation on Brexit, Brexit being one of the key drivers on GBP/AUD. We recently saw a spike up to 1.88 following what was deemed to be positive news on Brexit. May’s talks with Corbyn over a deal that could be mutually acceptable from both Labour and the Conservatives caused the Spike. I believed the gains for Sterling would be short lived as I had little faith the talks between May and Corbyn would result in a deal that would pass through the House of Commons. This proved to be true.

I believe Sterling could be in for further losses as if Farage’s becomes the UK’s representative in the bloc, it would show a huge power shift away for m the usual top contenders, creating further political uncertainty. Many believe if he does prove to be  successful this could be the final nail in the coffin for May and she will be forced to step down, she has proved extremely resilient up to this point however.

May made a speech yesterday and she stated the House of Commons vote on her deal may now be delayed from the first week of June. This was not taken well and has seen her unpopularity grow. The thoughts in many of the voters minds is no doubt that if her deal fails to be passed she will resign.

I think the vote is destined to fail when it takes place, this may be already factored into GBP/AUD to some extent as the market moves on rumour as well as fact, but I think this could also cause the Pound to lose value. The usual market reaction if a leader of a Country steps down or is ousted is that the currency in question would weaken, however in this situation we could see the opposite as anew Tory party leader may be deemed to have a better a chance of sorting out this Brexit mess.

The Aussie has had it’s own trouble, Australia has a heavy reliance on China purchasing it’s goods and services and any decline in Chinese growth will impact the Australian economy and in turn the Australian Dollar. The escalation in the US/China trade war is causing investors to move away from riskier commodity based currencies such as AUD for safe haven investments.

There is also the probability of an interest rate cut from the Reserve Bank of Australia next month, so despite the potential for further Sterling gains it may be wise to move before the decision if you are selling the Aussie.

If you have a currency requirement I will be happy to assist. 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 endeavour 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 18yrs, 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.

 

 

 

 

Shock Election Win for Australian Coalition Party & Breakdown in Cross-Party Brexit Talks Dominate the Headlines (Matthew Vassallo)

GBP has found some welcome support against the AUD over the past 24 hours, helping to curb any further losses after last week’s downturn.

Investors sold off their GBP positions in haste following a breakdown in cross-party Brexit talks. With both the Conservatives and Labour laying the blame for the breakdown at each other’s feet, investors’ confidence in the UK governments ability to achieve Brexit via a smooth transition, has quickly evaporated.

This negative feeling transpired and caused Sterling to lose over three cents in value against its Australian counterpart, with the Pound falling below 1.84 towards the end of last week.

Whilst the current outlook regarding the UK’s Brexit is still cloaked in uncertainty, the Pound has at least found a level of support during the early party of the trading week. GBP moved back above 1.85 overnight at its high but fell again as the results of the Australian election were finalised.

The very unexpected result was confirmed, and the expected Labour did not materialise. This went against the vast majority of the opinion polls, which for almost two years prior to the general elections, put the Labour party ahead of the more conservative Coalition, led by the now Prime Minister Scott Morrison.

How the new government’s policies will affect the Australian economy will be realised over time but for now the markets have taken a cautious approach to the new regime and with the Brexit undertone likely to continue to drive market sentiment and much of Sterling’s value, it may be the at the Pound struggles to make any sustainable inroads back towards and over 1.90 against the AUD in the short-term.

If you have an upcoming AUD currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over nineteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

AUD to GBP Strength after Australian Election (James Lovick)

The pound to Australian dollar exchange rate has fallen lower following the Australian election result which has helped boost the Aussie dollar. Prime Minister Scott Morrison has been re-elected despite being behind in the polls in the campaign. This campaign was won on economic management, tax cuts and the pledge to return to a budget surplus.

There is a good short term opportunity for those looking to sell Australian dollars for pounds with rates for AUD GBP having moved to 1.84 for the pair. Whether the Australian dollar will continue to strengthen remains to be seen. The Reserve Bank of Australia is potentially looking to cut interest rates in the months ahead and this could see Australian dollar weakness. This will be the first time the central bank will have changed rates since 2016 and could see a big movement in the Australian dollar.

UK Politics are also about to create volatility for GBP vs AUD with the European elections to be held this Friday. There is a growing expectation that the two major political parties will be punished at these elections like never seen before and could help redirect the debate on Brexit. A big shift to the newly formed Brexit Party under Nigel Farage will likely reinforce the Leave vote and put pressure on politicians to deliver on Brexit and potentially with a cleaner break.

A drop in the price of sterling may be seen if the electorate vote for the Brexit Party in large numbers. Following this the fourth and final meaningful vote on the current withdrawal agreement will be held week commencing 3rd June. If the Prime Minister is unable to push through her Brexit deal in the House of Commons then the options on Brexit are either no deal or revoke Article 50 altogether. Either of these outcome would likely see a major volatility for sterling exchange rates and the GBP to AUD pair.

The Australian dollar may be influenced by a speech from US Fed Chair Jerome Powell on Tuesday. The US Fed have changed tact on the rate cycle having paused on any further rate hikes. The Fed has indicated that it would like to start to keep the markets guessing as the Fed has done historically and so any sudden shift could impact both the US and Australian dollars. Changes in the US have direct knock on effect on the Aussie dollar as the divergence between the two economies is calculated by investors.

For more information on the Australian dollar and guidance in making transfer either buying or selling Australian dollars then please contact me James at jll@currencies.co.uk

Australian dollar forecast : Will the Australian dollar rise or fall in May?

My view is that the Australian dollar could be on the back foot now as investors become more concerned about the RBA (Reserve Bank of Australia) cutting interest rates. The RBA will meet next Tuesday and there are some who think there is an increased chance of an interest rate cut, owing to some lower inflation numbers released in April. We also have the Australian election due on the 18th, the Australian dollar could therefore be in for a busy month.

The RBA has been in a holding pattern on interest rates for quite some time despite various changes in sentiment since 2016 when the RBA last cut rates. There has been continued speculation the RBA would need to cut again following increased concerns over the economic outlook in Australia, following the trade wars between the US and China.

With the trade wars concerns gently fading under the impression the two sides will strike an agreement, there has been less pressure on the Aussie dollar in recent weeks but the backdrop of such issues looks like it will continue to weigh on sentiment. Even if the US and China do pass a new deal, it is clear that global trade has changed forever under Trump, and the Aussie dollar as a currency so closely linked to global trade, will continue to be influenced by this news.

For me, May is more about the domestic issues facing Australia with low inflation prompting analysts to believe a cut is the way forward for the RBA. Whilst I am not overly confident the RBA will cut, I expect they will comment that they may well do in June, which I believe will weaken the Australian dollar.

The election on the 18th May is also a reason for concern in May, with the Labour party looking to perform well which could well have a negative outcome for the Australian dollar, since they have numerous plans to spend more. The election is likely to be a very topical even over the next 2 weeks and may well sway the Aussie dollar, increased volatility should be expected.

May looks set to be a very busy time for the Australian dollar so if you have any transactions that you are considering, please do not hesitate to contact me to discuss the latest news and forecasts, which will influence the value of your transfer. I work as a currency broker and can offer guidance as to some of the best strategies to consider when making an Australian dollar currency transfer.

Thank you for reading and please contact me directly to learn more on jmw@currencies.co.uk

Jonathan Watson

Pound to Australian dollar predictions: Will the pound continue to rise against the Australian dollar?

Over the last 4 weeks there have been opportunities for clients selling pounds to buy Australian dollars and vice versa. A month ago GBPAUD mid market exchange rates were trading close to 1.87. Following the UKs decision to extend Article50 by 6 months the pound lost momentum and dropped to 1.81 just over 10 days ago. However the pound has fought back with mid market rates now at a 10 day high of 1.84 due to the economic data released in Australia.

Quarterly inflation numbers for Australia released in the early hours of Tuesday morning dropped to 0% which is a major concern. Off the back of the news ANZ and TD securities which are well respected in their fields have both predicted that an interest rate cut of 25 basis points is on the horizon. Past history tells us when a central bank cuts interest rates the currency in question tends to be sold, meaning it becomes less valuable, hence the reason why pound to Australian rates have risen.

Looking further ahead, UK Prime Minister Theresa May is going to continue the negotiations with the leader of the opposition Jeremy Corbyn. The Prime Minister is hoping to thrash out a deal early next month in a bid to avoid European Elections. The reality is the PM is not prepared to remain in a customs union therefore its difficult to see how they will find a solution. Therefore I expect the UK will take part, which will cause more uncertainty for the PMs future and consequently the ongoing Brexit saga.

However short term the pound could actually make gains against the Australian dollar due to the problems down under. Next week Australia release their latest building permits and home sales numbers. If they fail to impress then the chances of an interest rate cut by the Reserve Bank of Australia  will increase which could put major pressure on the Australian dollar.

If you are looking to buy or sell Australian dollars in the upcoming months, I recommend that you get in touch. The currency company I work for offers fantastic rates whilst providing regular market information. My direct email address is drl@currencies.co.uk. Feel free to email with a detailed description of your requirements and I will respond with your options and the process. If you are using a currency provider at present feel free to drop me an email for a quote.

Pound to Australian Dollar Forecast – Brexit Limbo does not bode well for the Pound

UK & Brussels at Impasse

Although investor concerns may have been eased following the Brexit extension the Pound still remains fragile and I would be surprised to see any significant gains against the Australian Dollar until we have firm news on Brexit. It seems as though the UK and Brussels are at a complete impasse, Theresa May has put several different alternatives to her deal to the House of Commons all of which have failed to gain a majority and Brussels have stone walled the UK stating it is the current deal or nothing.

European Council President, Donald Tusk sent out a warning to his “British friends” saying “please do not waste this time .” It seems as though another extension will be unlikely.

Brexit remains in Limbo and I would not be surprised to see us in a similar situation come October.

The Australian Dollar has its own problems however, Housing prices remain inflated in high wage growth areas such as Melbourne and Sydney. It mean Australians are being forced to spend their hard earned money on necessities rather than luxury goods and services.

Australia  has a heavy reliance on China purchasing its goods. The US/China trade war is causing a slowdown in Chinese growth which is having a knock on effect to the Australian economy and in turn the Australian Dollar. Iron ore is Australia’s primary export and fluctuations in its price can cause a change in Australian Dollar value, it is worth keeping an eye on if you have a trade involving the Aussie.

Recent news coming from US/China trade talks suggest an end could be in sight. US Treasury Secretary , Steven Mnuchin has stated we could see a conclusion to the trade war in under a month. If this is the case we could see substantial gains for the Aussie.

There are still however key points of contention. The US would like to keep existing tariffs in place in order to keep pressure on China , while Beijing would like them stopped immediately.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 18yrs and FCA registered.
If you would like my help feel free to email me at dcj@currencies.co.uk.

Pound against the Australian Dollar falls as RBA may not cut interest rates

The Australian Dollar has seen some signs of strength recently as it appears as though the Reserve Bank of Australia may not be looking at cutting interest rates as soon as previously expected.

The Trade Wars between the US and China also appear to be getting closer to a resolution and as China is Australia’s largest trading partner this has helped the value of the Australian Dollar.

Australian is also a huge producer of Iron Ore and its main export market is China. Australia has approximately 65% of the global market and any price change in the value of the commodity will often affect the value of the Australian Dollar.

Chinese demand has started to increase for the commodity and rumours are increasing that many Iron ore mines in Brazil are due to be closing. This means that global supply will reduce which will in theory increase demand for Australian iron ore.

However, although the news is good concerning the news above, the risk going forward is that of the Australian election which is due to take place in just over a month’s time.

Labour are doing well in the polls so a change in leadership could see the Australian Dollar come under pressure once again so make sure you keep a close eye out on the election campaign as this is likely to have a big impact on the Pound against the Australian Dollar.

Meanwhile, the ongoing uncertainty caused by Brexit has caused the Pound to weaken marginally against a number of different currencies which is good news for anyone looking to buy Pounds at the moment as GBPAUD exchange rates are at the lowest rate in two months.

If you have a currency transfer to make and would like to save money on exchange rates then contact me directly for a free quote and I look forward to hearing from you. Having worked in the currency industry since 2003 for one of the UK’s leading currency brokers  I’m confident that I can save you money compared to using your bank for the transfer of Australian Dollars.

Tom Holian teh@currencies.co.uk

 

 

Pound to Australian Dollar Forecast – Daniel Johnson

GBP/AUD – Brexit continues to dictate GBP/AUD and at present the situation remains in Limbo. Theresa May has now failed on three separate occasions with her deal and at present the default action if a deal is not reached by 12th April is the UK will leave the EU with no deal. Both sides are desperate to avoid this situation and it looks as though the outcome will be an extension.

How long the extension will be and with what stipulations is what is being hastily negotiated. May favours a short extension whereas Brussels would like a flexible year extension in place.

I believe an extension is already factored into current GBP/AUD levels as the market moves on rumour as well as fact. I would expect Sterling to gain value if an extension is confirmed as investor concerns are eased. Do not expect any great shakes however.

GBP/AUD has remained above the key resistance point of 1.80 despite the lack of progress in Brexit talks, I think this can be mainly attributed to the probability of a no deal remaining low with the vast majority of the House of Commons set against allowing a no deal scenario to occur.

I think Sterling will however remain fragile until we have firm news on Brexit, which now could be some way off. The Australian Dollar has it’s own concerns however. Housing prices in high wage growth areas continue to inflate and Australians are being forced to spend their money on necessities rather than luxury goods and services which is hurting the economy. The ongoing trade war between the US and China is also a key concern. Australia has a heavy reliance on China purchasing it’s exports, particularly iron ore. In fact iron ore value has been known to cause sways in the value of the Aussie.  The trade war is influencing Chinese growth which in turn has an impact on the Australian economy and the Australian Dollar.

Investors are choosing to shy away from riskier commodity based currencies in favour of what is considered to be safe haven currencies such as the Swiss Franc or the US Dollar.

I think if it were not for Brexit we could be seeing gains for Sterling against the Aussie, but at present you really need someone with an eye on the markets for you if you wish to take advantage of any spikes on the market, which recently have only been small windows of opportunity.

If you have a currency requirement I will be happy to assist. 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 endeavour 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 18yrs, 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 .