Category Archives: Australian Dollar Weakness

Turkish situation helps the Pound (Daniel Johnson)

GBP/AUD – Sterling has gained ground against against the Aussie of late. I would not put this down to Sterling strength however. I think the rise in the Pounds value can be attributed to a lack of investor confidence in commodity based currencies following the situation in Turkey.

With the severe fall in Turkish Lira and the lack of monetary policy intervention investors have been seeking safe haven investments. If the US-Turkish trade war escalates this could again have knock on affects to the Australian Dollar. We have seen the situation ease in the last 24hrs as Qatar have offered financial support to Turkey.

Despite the Australian monetary policy outlook not being particularly favorable the uncertainty on the Brexit situation outweighs any concerns for the Australian economy.

GBP/AUD now sits just above 1.75. I believe there is potential for Sterling to fall further due to the lack of clarity surrounding Brexit. With a “no deal” scenario still a possibility the Pound remains anchored at low levels against the majority of major currencies.

If you have to move short term buying the Aussie I would take advantage of current levels.

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.

Pound makes gains vs the Australian Dollar after Turkish issue and UK inflation data due out (Tom Holian)

The Pound has made some gains vs the Australian Dollar over the last few days and the move appeared to happen following the news in Turkey that Donald Trump has imposed an addition to tariffs on both steel and aluminium on Turkey and this started to cause huge problems in the country.

The Turkish Lira has dramatically weakened in value over the last few days and this has caused a number of commodity based currencies to weaken as global investors have sold off riskier based currencies including the Australian Dollar.

After briefly flirting with rates in the 1.73 levels recently the Pound vs the Australian Dollar is now back to trading above 1.76.

Meanwhile, the Reserve Bank of Australia confirmed recently that it will be keeping interest rates on hold while it waits for economic growth to improve and this has also helped the Pound to make gains vs the Australian Dollar and the Australian Dollar is now at its lowest level vs the US Dollar in two years.

The RBA does not appear to be too concerned with the value of the Australian Dollar and because it is a big export market if the AUD continues to weaken then this could help to improve economic growth in Australia.

The UK and the Pound has had a good start to the week against a number of different currencies with the news that UK unemployment is close to its lowest levels since 1975 with the figure now sitting at 4%.

We could be in for further movement later this morning with the release of UK inflation data due to be published at 930am.

Inflation has been a big factor in the Bank of England’s recent decision to increase interest rates and with the data expected to show 2.5% year on year which is above the 2% target then this could provide further evidence in support of further rate hikes in the UK which could help to move GBPAUD exchange rates in an upwards direction.

If you would like a free quote or further information about how to save money compared to using your own bank when converting Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk 

 

 

AUD Forecast – Economic Crisis in Turkey is Negatively Impacting the AUD (Matthew Vassallo)

Sterling has made inroads against its AUD counterpart over the past few days, with GBP/AUD rates moving back above 1.76.

The AUD and other commodity-based currencies have seen their value dip, since the Turkish economic crisis deepened towards the later part of last week.

The Turkish Lira (TYR) has hit record lows against the USD, with inflation levels in Turkey hitting a staggering figure of 15%. The Turkish stock market has fallen by over 17%, causing investors to panic, whilst also sapping their risk appetite.

When the global markets stutter and investors risk appetite falls, usually commodity-based currencies feel the negative effects first. These are considered riskier assets by investors, which are generally sold-off in times of global market uncertainty. This is one of the reasons why the Pound has made inroads against the AUD over the past few days but the key question now, is how much higher is Sterling likely to go?

With UK Prime Minister Theresa May on holiday, Brexit talks will remain on hold until her return. This means that the current crisis in Turkey is likely to dominate headlines over the coming days, which could lead to further pressure on the AUD.

The UK economy also received a boost this morning, following the release of the latest UK Unemployment data. The official Unemployment Rate fell to 4%, which could also help to support GBP around its current levels.

Moving forward and the markets concerns over Brexit have not disappeared and are likely to resurface before long. Therefore, if I was holding Sterling and looking to buy AUD, I would be keeping a close eye on market developments in the short-term, rather than holding out for any longer-term sustainable gains.

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 eighteen 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.

To what extent will Turkish sentiments drive GBPAUD this week?

The Australian dollar has been weakening as investor sentiments are frayed following the Turkish concerns which have been rattling financial markets. Essentially riskier assets are being sold off in favour of safer haven investments like the US dollar and Japanese Yen. The Turkish currency is being sold off and the funds are finding their way into the US dollar, creating big swings on other currencies like the Aussie.

GBPAUD has risen almost 1% today as investors also sell the Australian dollar because they feel it could also be at the mercy of the same sentiments which have driven the Turkish lira lower. For many years the cheap flow of money from the US in the form of QE (Quantiative Easing) had found itself invested  globally in emerging markets which offered higher returns.

With the market becoming spooked at the potential of further sell-offs, we could easily see a further deterioration in the Australian dollar which would see it become more expensive to buy. The outlook is not all rosy for AUD buyers with sterling however, as the rising US dollar is weighing the pound down too.

GBPAUD could be in for a very volatile period as the market struggles to price in the uncertainty up ahead. The market is eagerly looking for some kind of solution to the crisis which could easily spread to other investments and currencies. The problems in Turkey are not just effecting Turkey, many European banks have huge exposure to Turkish investments.

There is also important data due for the UK with Unemployment Tuesday, Inflation on Wednesday and Retail Sales Thursday. On the Australian side we have Unemployment data released Thursday, all in all a busy week ahead for GBPAUD.

I foresee a levels in the mid-1.70’s following a testing of the 1.73 level last week. In the absence of a new negative news I see sterling finding some support, the Turkish pressures should also ensure the Australian dollar is not appreciating too much.

For more information on the best rates and strategy to maximise your deal, please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Australian Dollar still weakens as ASX falls due to U.S-China trade tensions

The Australian Dollar has had another fairly tough week against most major currencies, with the main reason being put down once again to the growing trade tensions between the U.S and China that do not appear to be going away soon.

These tensions are also weighing on the Australian share market, with commodities prices losing value the higher the tensions are.

U.S proposals are still not being taken well by China and the threats from China to take countermeasures are merely adding to global investors steering away from the perceived risk of the Australian Dollar and moving into safer haven currencies.

I have personally felt that the Australian Dollar would be in for a tough time for a while now, it is still managing to hold it’s ground at the moment with everything being taken into account, but I do feel that the issues with China will continue to weigh on the value of the Australian Dollar, not just the trade wars but also the growing levels of debt in the Chinese economy which have been a problem for quite some time now.

As many regular readers will know Chinese issues can impact the value of the Australian Dollar due to the sheer volume of goods and services that China import from Australia and also the huge amount of tourism that China provides to the Australian economy too.

All eyes will continue to be on Trump’s next move and also the U.S data release which is Non-Farm payroll data due out during trading on Friday. This release can impact global attitude to risk therefore can impact the value of the Australian Dollar too.

If you have a transaction to carry out involving exchanging Australian Dollars into any major currency, or buying Australian Dollars with any major currency then it would be well worth getting in touch with me directly.

You can contact me, Daniel Wright on djw@currencies.co.uk if you would like more information on how I can help you and I will be happy to get in touch personally.

BOE Interest Rate Decision (Daniel Johnson)

GBP/AUD – Tomorrow we will see the Bank of England (BOE) interest rate decision. There is a high probability of a hike to 0.75% although personally I feel it would not be justified. There has been several poor data releases, average wage growth has fallen along with retail sales. Unemployment is being lauded as the lowest in over forty years, this however is misleading as current data includes zero hour contracts which is far from a stable form of employment.

Be wary of thinking a hike could strengthen the pound. The market moves on rumour as well as fact so it could well be the case that you will not see Sterling rally if a hike goes through. The real market mover will be Mark Carney’s speech following the decision. This is where he will discuss future monetary policy, if a hike goes ahead Carney could indicate that there will be any further rate hikes for the foreseeable future.

If this does occur we could see Sterling weakness following the decision.

GBP/AUD still remains range bound between 1.75-1.80. The Aussie is currently being held back by the ongoing trade war between the US and China. Australia is heavily reliant on China purchasing it’s exports. China’s growth could be effected by the trade war which in turn will hit the Australian economy. Investors are moving from riskier commodity based currencies to safe haven currencies. The US Dollar is currently the destination of choice despite the US involvement in trade wars on several fronts. Ten year treasury bonds are currently offering the best returns in years and interest rate levels are impressive, there could also be further hikes from the Federal Reserve this year.

If you have to move short term buying AUD aim to move if Interbank is in the 1.78s.

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

 

Australian Dollar continues to lose value as inflation levels stall

The financial markets don’t expect to see the base rate of interest change down under until the end of next year according to futures markets, and this is perhaps one of the reasons behind the Aussie Dollars weakening currently.

If the Reserve Bank of Australia (RBA) doesn’t amend rates the AUD will lose competitiveness as we’ve already seen, as the likelihood of investors holding assets in the currency diminishes owing to the less competitive of the currency. The US Dollar on the other hand has benefited greatly from its more aggressive monetary policy and the greenback has strengthened by such an extent that US President, Donald Trump has voiced his concerns.

The latest bout of Inflation data out of Australia shows that inflation has risen by 2.1% over the past year, which is slightly lower than what economists were expecting. There doesn’t appear to be much momentum regarding Australian inflation levels which is perhaps the reason behind the low expectations of a rate hike in the short-term future.

Although the Pound has been under pressure in recent months owing to the Brexit plan uncertainty, the Pound to Aussie Dollar rate is still towards the top end of it’s longer term trend, which demonstrates the pressure AUD exchange rates have come under. The GBP/AUD pair is likely to be driven by both monetary policy and UK based politics as the UK is going through a crucial time due to the Brexit.

Those monitoring the Aussie Dollars value should also pay attention to US President, Donald Trumps trade tariff’s plans as AUD has come under pressure owing to these concerns. With the Australian economy being reliant on global demand a slowdown to the global economy is likely to have a negative impact the Australian Dollars value.

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.

The reasons why the Pound could climb against the Australian Dollar this month (Tom Holian)

Sterling vs the Australian Dollar has remained in a relatively tight range recently although GBPAUD rates have been trying to hit 1.80 on a number of occasions already this month.

In my own opinion I think it is only a matter of time before the Pound breaks past 1.80 as the Australian Dollar is coming under a lot of pressure recently.

The latest report from China in terms of GDP data has shown a slowdown to 6.7%, which although this is clearly much higher than that of any of the western economies this has caused concern for the world’s second largest economy and this has caused the Australian Dollar to weaken against a number of different currencies including the Pound.

The US has been threatening China with a Trade War and has put in potential plans to raise tariffs of US$200bn to come into play in the next few weeks.

Whether or not this is simply the US flexing its financial power or it will take place is anyone’s guess at the moment but the uncertainty it has caused has made global investors move money away from riskier currencies and towards the US Dollar and this has in turn harmed the value of the Australian Dollar.

Earlier this week the Reserve Bank of Australia released the latest set of minutes and they confirmed that interest rates are likely to be kept on hold for the time being.

With the US planning further interest rate hikes as well as the UK considering doing the same as early as 2nd August this is another reason why we could see the Pound moving in an upwards direction against the Australian Dollar in the next fortnight.

If you have a currency transfer involving Australian Dollars and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing form you.

Tom Holian teh@currencies.co.uk

GBPAUD remains range bound

Over the last 30 days GBPAUD exchange rates have fluctuated in the higher 1.70s with minimal movement as both currencies seem to have been devaluing at the same pace. At the latest Reserve Bank of Australia meeting officials showed concern in regards to the trade tariffs that have been imposed on China by the US. The Australian know that a slowdown in China will have an impact on the Australian economy. Furthermore the International monetary fund have waded into the debate and announced an all out trade war will end up costing the global economy over $430bn.

UK Prime Minister Theresa May is under extreme pressure and last night threatened Tory rebels that she would call a general election if the amendment in regards to the customs union went through the Commons. The uncertainty of another General election would certianly weigh on the pounds value. Furthermore Governor of the Bank of England Mark Carney also failed to help the pounds value yesterday, as he stated a Brexit no deal would mean the Bank of England would have to rethink their future plans.

At the end of the week, UK politicians break for the summer holidays, therefore I expect Brexit related news to go quiet for a few weeks. All eyes will turn to the Bank of England’s interest rate decision early August. The market has been pricing in a hike, however I expect the Bank of England will fail to deliver which will mean sterling takes a hit. Therefore I wouldn’t be surprised to see GBPAUD fall back towards the mid 1.70s over the next month.

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.

Australian Dollar weakens following RBA meeting minutes

Tuesday saw a fairly poor performance by the Australian Dollar against most major currencies, following the release of the RBA (Reserve Bank of Australia) meeting minutes from their last interest rate decision.

The minutes will basically show what was discussed at the meeting and how the RBA came to various decisions and i’m afraid the tone was fairly negative when reading through discussions and future fiscal plans.

The main areas of concern are the on-going trade wars between Donald Trump and China, as many regular readers of this site will be aware Chinese economic performance is fairly crucial to the performance of the Australian economy and the Australian Dollar. Not only do China import a huge amount of goods from Australia but they Chinese tourists make up a fairly large percentage of tourism in Australia.

The large sum of household debt at present in Australia is also of great concern to the RBA. Household debt is currently at worrying levels and what this means is that until this starts to drop back off it will be very difficult for the RBA to raise interest rates, and they did put a nod to this in the minutes.

Should they raise rates then we may see a large quantity of households go into default in Australia which would only escalate the economic problems even further, it does now appear that unless things improve then will not be seeing an interest rate hike for the foreseeable future which will more than likely hold the Australian Dollar back against other major currencies.

An interest rate hike is generally seen as positive for a currency and with other areas around the globe slowly raising their interest rates the Australian Dollar is in danger of being left behind.

If you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like assistance with developing your strategy then you are more than welcome to get in touch. I have been helping clients move money internationally for over a decade and will be more than happy to have a chat with you about your specific needs.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will get in touch with you personally.