Category Archives: Australian Dollar Weakness

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.

Will GBPAUD rise back above 1.70??

The expectation for GBPAUD exchange rate is rather mixed with the pound really struggling to make much headway following a tough week. Tuesday saw GBPAUD drop as members of the Bank of England confirmed they will not be so positive about raising interest rates. The overall belief the pound would rise if the Bank of England raise interest rates has been supporting the pound but this is now looking less likely. The Australian dollar has also been benefiting and rising because the US Federal Reserve have been slightly move dovish (soft) in their approach towards raising interest rates.

If you are buying Australian dollars with pounds there is a belief we could see 1.70 but I think it is more likely the GBPAUD rate will actually drift lower. This is because there are so many negative factors surrounding the pound and I believe market conditions are much more supportive for the Australian dollar to rise. This largely stems from the fact the Australian dollar is a commodity currency and will appreciate in value when investors seek a higher return.

If you need to buy Australian dollars with pounds the short term forecast is not looking so good. Trading conditions seem to favour sterling slipping, I mean just what would actually lead to the pound rising? Uncertainty over the Brexit and the UK economy indicates to me the pound will remain on the back foot. I also believe the Australian dollar will retain much of its strength in this current climate.

If you have a transfer to make then getting all the information available and tracking the latest trends is key to helping maximise your transfer. A 1 cent improvement on a £200,000 transfer buying Australian dollars could achieve you an extra 2000 Australian dollars!

For more information at no cost or obligation please speak to me Jonathan by emailing jmw@currencies.co.uk. We are expecting some really interesting movements on the GBPAUD rates, of course it won’t be just downward, there will be spikes to take advantage but you need to be prepared! This is what we can help you to monitor and achieve.

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

 

 

Australian dollar overvalued? (Dayle Littlejohn)

In recent times major central banks including the European central bank, Bank of England, Bank of Canada and the Federal Reserve have been taking a hawkish approach and indicating that they could be raising interest rates in the near future. When a central bank raises interest rates we tend to see the currency strengthen as investors flock to the currency.

However the tone from the Reserve Bank of Australia was far from hawkish when they released their latest monetary policy decisions over a week ago. The National Australian Bank believe that the Australia dollar is overpriced at present and if the RBA gave a hawkish statement the dollar would be purchased further and therefore increase in value.

Looking further ahead the NAB believe the Federal reserve will continue to raise interest rates which will mean investment will leave the Australian dollar and strengthen the US dollar, and I have to agree with the predictions.

In relation to GBPAUD exchange rates I expect the Australian dollar to devalue slightly however the golden question is whether this will outweigh Brexit? I fear at any point Brexit negotiations could reach a stumbling block and therefore the pound would weaken dramatically.

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! **

What factors could cause the Aussie Dollar to weaken? (Joseph Wright)

Last week the Pound found itself under pressure after a raft of bad data out of the UK has resulted in concerns in a slowing down of the UK economy.

Data showed slowdowns in the manufacturing, construction and importantly the services sector and although the readings were in line with previous readings when GDP is running at 0.4%, the economy is slowing as we enter the 3rd quarter which is a negative sign for those hoping the Pound will climb as the year progresses.

The Reserve Bank of Australia disappointed Aussie Dollar bulls and those hoping the Aussie Dollar will climb last week. Many had hoped for indications of future interest rate hikes from the RBA but these comments never came, with many analysts now confident of a rate hike this year.

The price of Iron Ore has firmed up recently offering AUD some support, but the mixed messages the markets are receiving regarding China’s economy (and whether or not the figures they release are 100% truthful) is likely to weigh on the Aussie Dollars value.

The issues surrounding the housing market overheating in parts of Australia is also likely to be a talking point, and it’s quick market movements that we can help our clients take advantage of in a number of different ways, so feel free to get in touch if you wish to discuss this in further detail.

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.

GBP/AUD Forecast – Is the Australian Economy Heading for a Collapse? (Matthew Vassallo)

GBP/AUD rates are still trading above 1.70 but the AUD has found support, after Sterling broke through 1.71 yesterday.

The AUD has fought back, gaining over a cent at the high, as the markets prepare themselves for a busy day of economic data releases.

At 09.30 the latest Manufacturing & Industrial Production figures are released. With an improvement on last month being anticipated by investors, it will be interesting to see whether any positive news has been factored into Sterling’s current value.

Trade Balance figures are also released shortly and this shows how much we spend on imports, compared to the money we make on exports. This is a key barometer for any economy and as such any clients with a GBP or AUD requirement should be keeping a close eye on developments. These figures will be monitored even closer over the coming months, as the UK separates itself from the EU and will be used to gauge how any new trade deals are faring.

However, it will be the latest NIESR Gross Domestic Product (GDP) estimate alongside Carney’s speech, which could shape GBP/AUD rates for the subsequent days.

Any further bullish comments regarding future rate hikes, or a positive reading from NIESR could help Sterling break back through 1.71.

Similarly, any negative reading or diluted comments by Carney could push the pound back down and the recent gains could be eliminated extremely quickly.

Looking at the Australian economy and on the surface, it seems to be performing well. China’s economy has stabilised and this has boosted Australia’s affluent export industry, which in turn has helped to support the AUD’s value.

However, a concerning report released overnight has suggested that Australia’s economy is heading for a potential “economic collapse”, according to former economic & policy adviser John Adams. He had urged the Reserve bank of Australia (RBA) to take pre-emptive action by raising interest rates to prevent Australia’s expanding household debt bubble from exploding and now feels it is too far gone to recover.

Whilst this is one man’s opinion, any negative reports such as these can have a detrimental effect on market perception of an economy and the AUD could suffer over the coming days as a result.

The current market remains as unpredictable as ever, which is why I have been advocating that my clients take advantage of any short-term gains and protect their positions where possible.

I have little confidence in the current UK government producing a Brexit deal that will propel the UK economy forward and with the potential problems facing the Australian economy, are you prepared to risk your currencies value and gamble during such uncertain times?

We are able to help guide our clients through the current market, helping them time their currency exchange to maximise the market value available.

Our award-winning exchange rates, mean that even on a falling market clients will extract the most value and we can also keep you posted with key market developments ahead of any prospective transfer.

Please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt, or alternatively I can be emailed directly on mtv@currencies.co.uk

RBA Hold Rates and Aussie Weakens (Ben Fletcher)

The Reserve Bank of Australia kept rates on hold this morning with the interest rate staying at 1.5%. This was followed by a fall in Aussie strength which took the GBP/AUD rate above 1.70. Whilst this level has been close int he last few weeks the actual market price hasn’t got above this point.

Upward Movement Potential

The Federal Reserve in the United States are going to reveal their latest meeting minutes which will provide an insight into how they plan to re balance the books.

Over the course of the lest 10 years since the financial crisis the FED have bought trillions of bonds to keep US banks afloat, these are now going to be progressively sold off. If the market likes the plan then the USD could start to strengthen. The AUD is considered a more volatile currency and its common place that when the USD starts to strengthen, it results in investors taking funds from riskier currencies such as the AUD.

Therefore in my opinion we may wake up tomorrow morning to the GBP/AUD rate moving into the 1.72/73 region. This would see a return to levels last seen in the first week of June. If you’re looking to purchase Aussie Dollars with Sterling for a short to medium term requirement the mid 1.70’s in my opinion would be a good time to buy. There does appear to be general positive trend with Sterling as we have moved away from the election, but whilst Brexit bubbles away anything could change at a instance. This is why I would encourage acting on spikes as they’re few and far between at the moment.

If you would like to discuss a trade you need to complete either immediately or in the next year please feel free to send me an email. I would be happy to discuss my forecast with you and explain how I may be able to help you achieve the best rates of exchange. Please send me an email to brf@currencies.co.uk with a brief message of what you’re looking to do.

RBA’s dovish stance weakens the Aussie (Daniel Johnson)

Monetary Policy Statement not the news Australia wanted to hear

Yesterday saw the Reserve Bank of Australia (RBA) interest rate decision followed by the monetary policy statement. Rates remained unchanged at 1.5% as widely expected. The monetary policy statement however did give an indication to monetary policy moving forward, there was expected to be a hawkish tone and traders sat with their fingers on the buttons ready to move. There was predicted to be an indication of a rate hike in the coming months, but this was put to bed as there was much more dovish tone as the monetary policy statement was delivered.

We saw Sterling rally against the Australian dollar but 1.70 seems to be a resistance point. I think we will need to see a significant catalyst for GBP/AUD to remain above 1.70.

In order for Sterling to make significant gains the UK needs to have a stable government in place. The DUPs influence on Brexit negotiations is not yet clear. There needs to be clarity on the UK’s stance in exit talks,  there may now need to be more compromise on the UK’s side. The “have your cake and eat it” strategy no longer seems viable. If the UK wishes to control immigration it could be detrimental to trade and in order for trade to remain buoyant there needs to be a more lax stance on immigration, which if put in place goes against the vote to leave in the first place. It is a sad state of affairs, I think brought about by politicians with their own agenda.

There are  several pending data releases which will influence GBP/AUD over the coming weeks. If you let me know the details of your requirement I will let you know which may be beneficial to your specific situation.

Trading during this period requires a great deal of skill in order to maximise your trade. You need a thorough understanding of the markets if you wish to time your trade correctly. If you would like my no obligation assistance, feel free to email me at dcj@currencies.co.uk.

I will provide a individual trading strategy to suit your needs. Thank you for reading.

Daniel Johnson

Could the Pound vs the Australian Dollar make a sustained break past 1.70? (Tom Holian)

The price to buy Australian Dollars with Pounds has broken through 1.70 on a number of occasions through out today following the Reserve Bank of Australia’s decision to keep interest rates on hold.

May investors were hoping for more of a hawkish tone which means an interest rate hike but the RBA was rather cautious and stayed very neutral with its announcement.

Australian interest rates are currently sitting at 1.5% which is the lowest they have ever been and as they were kept on hold this has seen the Pound making gains vs the Australian Dollar.

The RBA are also concerned with how strong the Australian Dollar is against both the USD and the Pound and if they suggested an interest rate hike could be coming this could result in further strength for the AUD vs the Pound.

RBA governor Philip Lowe has stated that ‘consumption growth remains subdued, reflecting slow growth in real wages and high levels of household debt.’ These combinations mean that any rate hike could cause problems for the economy down under hence the soft rhetoric.

Indeed, any suggestion of any interest rate change coming was not mentioned so for me I think we could see further short term gains for the Pound vs the Australian Dollar coming soon.

The next catalyst for GBPAUD movement could come on Thursday with the release of the latest Australian Trade Balance data so keep a close eye out for what happens.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident of being able to save you money on exchange rates compared to using your own bank when buying or selling Australian Dollars.

If you have a currency transfer to make and would like to save money then email me directly with a quick description of your requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Aussie weakens as prospect of a rate hike diminishes!

Overnight the Reserve Bank of Australia kept the interest rate on hold as widely expected but signaled in their commentary that they were unlikely to raise interest rates anytime soon which has caused the Aussie to weaken. I did point out to readers the prospect of GBPAUD rising above 1.70 yesterday and now the key question is can the GBPAUD pair hold firm at this level?

This morning is some key economic data for the UK with the latest Construction figures, ultimately this represents only about 10% of the UK economy but is indicative of the direction the economy and therefore potentially the pound will take. Tomorrow we have more important data in the form of the latest Services news for the UK. Both areas had been on the wane in recent months prompting concerns about the effects of Brexit on the UK economy.

Will GBPAUD hold above 1.70? If you need to move a large volume (10,000 GBP to the multi millions) of pounds or Australian dollars say following an overseas property sale or business transaction making plans around this event is important. For a free, no obligation and chat about your transaction please speak to me Jonathan Watson by emailing jmw@currencies.co.uk or calling 01494 787 478 and asking to speak to Jonathan.

With the Australian dollar now losing some of its spark as investors see the currency as less likely to give them the returns they had hoped any surprises from the UK data could see GBPAUD comfortably back above 1.70 presenting an excellent short term spike to capitalise on. Careful monitoring of the price is key to getting the most from the market so for a free, no obligation and chat about your transaction please speak to me Jonathan Watson by emailing jmw@currencies.co.uk or calling 01494 787 478 and asking to speak to Jonathan.

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

Busy week for Australian dollar exchange rates! Will we rise above 1.70 on GBPAUD?

Tonight and later this week is some critical data for the Australian and global economy that may well shape exchange rates. Exchange rates move all the time for a variety of reasons but one of the main factors driving the Aussie are the outlooks from the Reserve Bank of Australia. The raising or lowering of the interest rate from the RBA has a massive impact on the movements on the Australian dollar as it alters investors perception over the currency. Tonight’s RBA news in the form of the Rate Statement and Interest Rate decision will be closely watched for its effect on the AUD and therefore GBPAUD rates.

Movements of a few cent in either direction cannot be ruled out as whilst the market believed the RBA would not have any change in policy the potential for the market to shift is always high on the Aussie. Owing to the higher interest rate in Australia of 1.5% versus other leading economies of less than 0% or very low interest rates, the AUD is used because of its higher ‘yield’. Like a higher interest rate on a bank account investors will use the Aussie to earn more on their money, therefore any shifts in the likelihood of that interest rate changing down the line will see the currency swing.

Key news later this week not just from Australia but also from the US could see changes in these global sentiments which make the AUD more or less attractive to hold. Clients looking to buy or sell the Aussie should be most aware of the potential for sudden switches in direction, if you are looking to make a transfer why not take a few minutes to contact me highlighting your position so that I can keep you updated on potential developments.

Despite the pound weaker many commentators are stating that perhaps the pound has been oversold. I really couldn’t rule out some small improvements but the likelihood of the pound struggling in the future remains high. If you have a transfer to make and wish for some assistance please speak to me Jonathan by emailing jmw@currencies.co.uk.

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