Category Archives: Australian Dollar Weakness

The Trump Factor and impact on the Australian Dollar (Tom Holian)

With Donald Trump now having been officially inaugurated into the White House it appears as though the US Dollar has fallen as investors review his first speech.

In what was a relatively protectionist tone we could see a global flight to safety which means global investors seek to move money into the US economy and away from riskier currencies including the Australian Dollar.

The US economy has gone from strength to strength during 2016 and this is one of the reasons for the strength of the Australian Dollar against Sterling for the last few months.

However, could we now see some weakness on the horizon for the Australian Dollar against the Pound?

With Prime Minister Theresa May coming out earlier this week and being rather bullish in her speech concerning Brexit the Pound quickly made some very strong gains vs the Australian Dollar providing some much needed respite from the problems seen recently.

There is little economic data due out next week for the UK and Australia until Wednesday so I expect GBPAUD rates to be driven by sentiment towards Donald Trump’s first few days in office and therefore we could see Sterling make some further gains vs the Australian Dollar.

If you’re in the process of needing to either buy or sell Australian Dollars and are concerned about what may happen between GBPAUD rates in the next few weeks as the Brexit talks continue to dominate the headlines then it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

If you have a currency transfer to make and would like to save money on exchange rates when buying or selling Australian Dollars compared to using your own bank or other currency broker then feel free to contact me for further information or for a free quote. Having worked in the industry since 2003 I am confident that with my experience I can help and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

Sterling holds on to it’s recent gains versus the Australia Dollar, will GBP/AUD approach 1.70 once again? (Joseph Wright)

The Pound has been climbing since Tuesday when the UK PM, Theresa May gave clarity to the UK Governments Brexit plans.

Uncertainty almost always weighs on the underlying currency in question and the Pound had felt the effects prior to her speech on Tuesday, but in it’s wake the Pound had one of it’s best days in years and gained against the US Dollar by it’s largest margin since 2008.

At the time of writing the Pound to Australian Dollar exchange rate is trading around the 1.63 mark and I wouldn’t rule out a move above 1.65 if the positive sentiment surrounding the Pound continues.

It’s also important to note that today is the day of Trump’s inauguration in the US, and due to the potential impact of his Presidency right from the onset, I wouldn’t be surprised to see investors lose interest in risk-correlated currency such as AUD, and prefer to hold funds within safe haven currencies such as the Swiss Franc or Japanese Yen. Should this be the case it’s likely that the Aussie Dollar will suffer, which could aide the GBP/AUD pair and push it above 1.65.

There are no major economic data releases today out of the UK or Australia so I expect sentiment and Trump’s inauguration to drive the pair, and moving forward if you wish to be kept updated with key data releases feel free to get in touch.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

Theresa May Boost sterling’s Value! – Will This Trend Continue? (Matthew Vassallo)

GBP/AUD rates spiked during yesterday’s trading, with the pair gaining almost two cents.

The Pound hit 1.6422 at the high before retracting slightly today slightly today, with the AUD finding support moving it back towards 1.63.

Sterling’s value had soared, following UK Prime Minister Theresa may’s speech regarding the UK’s Brexit.

This was her most detailed speech to date regarding how the government hopes to facilitate our exit from the EU, with Article 50 still scheduled to be triggered in March to start the formal process.

The Pound benefited from positive comments regarding a future relationship with the remaining EU states and made significant gains against all the major currencies.

The markets have been left in limbo for months regarding how the UK economy intends to prosper following our exit, so yesterday’s more detailed plan will have come as a relief to investors who have been craving some solid information to work with. Personally, I don’t think the speech gave us a real insight into future policies but of course the noises being made were that the UK would create a stronger economy, which still had a relationship with our closest neighbours.

Theresa May did state that we would no longer be part of the single market but hoped for new custom arrangements with the remaining 27 EU states and that we would still contribute to the EU budget but wasn’t specific regarding how much.

The AUD has benefited from a run of positive economic data and the uncertainty surround the UK economy at present. However, due to the fact the AUD is a commodity based currency and as such relies heavily on its export trade, in particular the export of its raw materials to China, any global slowdown in this sector will hit their economy hard and the AUD would likely lose value as a result.

If you have an upcoming GBP or AUD currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Theresa May’s Brexit speech causes Sterling rally (Daniel Johnson)

May causes volatility on GBP/AUD

Theresa May spoke yesterday in took some of the uncertainty away from the markets buy outlining her intentions in regards to a UK exit from the EU.

She stated the UK can not remain in the single market as this would mean not leaving the EU at all. She did also announce that any agreement with the European Union would allow the freest possible trade in goods and services.” Investor confidence was returned and GBP/AUD currently sits in the 1.63.

EU leaders have stated the freedom of goods, services and workers is not realistic if there is restrictions on the free movement of people within the EU.

Personally, I think this is a very positive move for the UK, giving some clarity brexit. But it is important to realise it may not all be rosy from this point. I feel trade negotiation targets need to be extended from the current target of two years. Sir Ivan Rogers, UK ambassador to the EU recently resigned over the unrealistic time scale for exit and insufficient planning. Rogers thinks trade negotiations could take as long as ten years.

The US have been very forthcoming about getting a trade deal in place which should bring more confidence to investors, however it is important to look at the history of the US in previous trade negotiations. The quickest of which took four years.

US Interest Rate Levels could cause investors to leave the Australian Dollar

In December the Federal Reserve rose US interest rates and forward guidance has indicated there could be as many three more during 2017. Although forward guidance can be taken with a pinch of salt, this years guidance does bare more credence. Data from the US has been very positive and it seems Yellen will find it difficult to keeping rates on hold. It will be the popular destination for investors with higher return than previously and also a higher level of safety than the Australian Dollar. Employment figures have been dwindling down under and there has been large falls of employment in the mining sector. There are also rumours circulating Australia could lose its AAA credit rating which means the Aussie could be in for a rough year.

If you have a currency requirement I will be happy to assist. It is vital to be in touch with an experienced broker to try and maximise your return. I will be happy to provide a free strategy and also provide a rate comparison against your current provider should you have one. I can be contacted at dcj@currencies.co.uk. Thank you for reading.

 

 

Australian Dollar gains on USD and other majors – Drops against the Pound following ‘Brexit’ Speech (Daniel Wright)

Today turned out to be a mixed day for Australian Dollar exchange rates, seeing gains against the U.S Dollar yet losing a great deal against Sterling.

The main reason for this is that the Pound had the best day we have seen in months, posting large gains against every major currency which included a 2% gain over the Australian Dollar and led to the U.S Dollar falling across the board too.

For those looking to sell Australian Dollars and buy Sterling this may be the start of the trend turning around but only the next 24/48 hours will give us a true indication as to whether this is just a knee-jerk reaction or whether we are about to see Sterling exchange rates pick up dramatically.

If you are holding Australian Dollars and you need to bring them back into Sterling then now may be the time to act. We are only a few percent away from the best time to do this in three years and now that Sterling is creeping back into fashion this may be the time to start seriously considering the options available to you.

Today we have Consumer Confidence figures in Australia and tomorrow we will be focusing on unemployment data over in Australia, not to mention the Bank of England interest rate decision on Thursday in the U.K so we still have an extremely busy week to come for both the Australian Dollar and the Pound.

If you are in the position where you may need to buy or sell Australian Dollars for Sterling, Euros, Dollars or New Zealand Dollars in the near future then I can help you both in terms of getting a better price than other well known brokers in Australia and the U.K, along with offering an extremely proactive  and friendly service to help you maximise your exchange rates.

If you are in the position where you may appreciate my help or if you would merely like a simple quote to check that you are getting the best exchange rate you can then feel free to email me (Daniel Wright) directly. You can contact me on djw@currencies.co.uk with a brief description of what you need and I will be more than happy to contact you personally.

 

Are GBP/AUD Rates Heading Below 1.60? (Matthew Vassallo)

GBP/AUD rates have dropped dramatically recently with the pair now trading under 1.64!

The Pound has lost over five cents this week following UK Prime Minister Theresa May’s comments over the weekend regarding Brexit and if this trend continues over the coming days we could see the AUD make a move towards 1.60.

Whilst the Pound is likely to find market support above this level, it is another example of how fragile the UK economy remains in the minds of investors and how the uncertainty surrounding the UK’s exit from the EU is having such a detrimental effect on the Pound’s value.

Theresa May’s interview gave us an insight into the current thinking of the government and whilst many will argue that she is trying to strengthen her negotiating position ahead of the triggering of Article 50 in March, any indication that we are looking at a hard Brexit will only add to investors’ concerns that the UK will find itself out in the cold for years to come.

We need to consider that at present the EU are in control of all our trade agreements and we as an economy have benefited from these. The UK has no real experience of negotiating trade deals and with immigration also a key topic to consider, how will the UK economy fair for the 5-7 years it could take to put these agreements in place?

Whilst the Australian economy is not performing overly well, it has these trade deals in place already and with China a key trade partner and a generally growing economy, they can fall back on these in times of economic hardship.

The Pound did find some support yesterday following comments made by UK Chancellor Philip Hammond, who said that no decision had yet been made and that the UK could remain part of the single market but this to me is the key point, no one actually knows.

We remain in a unique position as no country has left the EU before and therefore investors are having to shoot in the dark and having to account for almost every outcome and therefore we do not have enough information to hand to make a firm decision either way.

With the Supreme Court meeting again today we could get a decision regarding the triggering of Article 50 at any time, so it would be wise for anyone with a Sterling currency requirement to keep in close contact with their personal currency broker, to ensure any opportunities that arise are not missed.

If you have an upcoming GBP or AUD currency exchange to make and you are looking for the best exchange rates available, then please feel free to contact us on 0044 1494 787 478 and ask one of the team for Matt.

We can provide key market information and analysis ahead of any transfer, whilst keeping you up to date with all the latest market movements. We help our client to time their exchange to maximise the market value available and have awards for our exchange rates and service.

If you would like to contact am directly I can be emailed on mtv@currencies.co.uk

Volatility expected on GBP/AUD (Daniel Johnson)

Supreme Court Judgement to impact GBP/AUD

Last weekend Theresa May stated during a Sky news interview that she would be willing to sacrifice free trade for control over immigration. This indicates her intention to implement a hard brexit.  Investors reacted and the pound fell against the Australian Dollar. The key factor on whether there will be a hard or soft brexit will be the supreme court judgement on whether parliament will get to vote on triggering article 50. If they do there is the strong possibility of a soft brexit and Sterling should rally. There could be temporary trade deals in place while new deals are struck which would take some of the uncertainty surrounding brexit away and give faith to investors.

If the ruling goes the other way, trade negotiations will be elongated and it is likely the two year target for an exit from the EU will no longer be realistic. Sir Ivan Rogers, the UK ambassador to the EU recently resigned stating an exit could take a long as ten years.

UK Manufacturing and GDP Data could effect GBP/AUD 

Today we will see the release of UK manufacturing data and also UK GDP, I think we could see an increase and as a result a small movement in Sterling favour against the Australian Dollar.

Australian Economic Outlook

Despite the potential for pound weakness short term, I feel Sterling could gain strength medium-long term against the Aussie. Once some of the uncertainty surrounding brexit is removed the pound should start to recover. Down under however, economic data has been poor and there are fears Australia could lose it’s AAA credit rating. With investors moving funds out of the Australian Dollar and moving to the safer haven of the US dollar. Higher returns are now promised State side with further interest rate hikes expected following the recent hike in December. It would be wise to keep an eye on Chinese data if you have a trade involving Australian Dollar. Australia are heavily reliant on the Chinese purchasing their raw materials. If Chinese growth dwindles expect Australian Dollar weakness.

If you have a currency requirement and would like assistance forming a trading strategy I will be happy to help. I will also provide a comparison against your current provider and I am very confident I can show you a significant saving. You can e-mail me at dcj@currencies.co.uk. I look forward to being of assistance, thank you for reading.

Australian Dollar makes gains on Sterling as ‘Brexit’ continues to leave the Pound in trouble (Daniel Wright)

Australian Dollar exchange rates have continued to make gains against Sterling this week as fears continue to grow in the U.K about the potential of a hard ‘brexit’ being the route that the Government will aim to take in negotiations once article 50 is triggered.

For those who are not aware, the U.K is going through a huge change at present and currently awaiting a Supreme Court hearing to decide what the next steps for that change may be.

We expect to see a decision in the coming days and should the Supreme Court stick with the original decision them Prime Minister Theresa May will have to put the decision to trigger Article 50 through Parliament, which may give the Pound a boost as it should lead to a higher chance of a ‘softer’ brexit.

Should the Supreme Court overturn the ruling about Parliament then we may see Sterling drop further as this heightens the chance of a harder brexit which would more than likely include leaving the single market and may lead to a number of problems further down the line for U.K trade.

All of this is causing a great deal of uncertainty and is casting a grey cloud over the Pound which is presenting a fantastic opportunity for those looking to sell Australian Dollars and buy Sterling.

If you are in this position then it may be prudent to start to consider your options, as although there are expectations that the Pound may fall a little further in the coming weeks, depending on the decision, I feel that later down the line Sterling exchange rates will climbe back as we start to see a little more certainty on just what may happen.

For assistance with any currency exchange it is essential that you have a proactive and efficient currency broker on your side. If you are in the position where you need to buy or sell Australian Dollars and you want to be kept fully up to speed with the market and to have any potential opportunities highlighted to you then let us be your eyes and ears on the markets.

You can email me (Daniel Wright) directly on djw@currencies.co.uk with a description of what you are looking to do and I will be more than happy to contact you personally and explain just how I can help both with the timing of your purchase and making sure you get commercial rates of exchange too. I look forward to hearing from you.

 

GBPAUD hits 2 month lows, what next?

Sterling has dive bombed as Theresa May hints that a hard Brexit is more likely as she outlines to pursue control of law and immigration. It is notable she has stated the only mistake here are anyone who implies in advance what the PM is really seeking in negotations. So whilst this GBP weakness may turn out to be unfounded much longer term for now it seems likely to persist. GBPAUD rates could easily test 1.60 or maybe even lower.

It isn’t all bad news as there is a strong likelihood the pound will rise on the Supreme court judgement which is expected to confirm Theresa May will need to seek the approval of parliament before triggering Article 50. This should lead to sterling rising as it makes apparent the Government will not have a clear path to their goals. There are all manner of wider interests in the UK seeking to derail Theresa May’s plans and the passage through parliament will not be easy on any bills. The UK might even need another election to ‘debate’ Theresa May’s vision.

So all in all I expect the pound to remain lower against the Aussie as it makes apparent that the pound will be the driver. There has lately been lots of good news in the Australian economy with some forecasting the RBA might be forced to raise interest rates later in the year. For now the strength of the US dollar is acting as a big drag on both the the pound and Australian dollar which will present swings.

On the whole I expect this market to favour clients selling AUD for sterling and clients looking to buy Aussies with pounds need to be paying extra attention and making extra effort to avoid problems. If you wish for some assistance to monitor the exchange rates and pick the spikes then you are reading the right blog. I work as specialist currency broker helping and assisting  clients looking to buy and sell Australian dollars with the most up to date news and market insight. For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading, I hope you find this useful and I welcome any feedback on the post or enquiries on GBPAUD transfers.

Jonathan

GBP/AUD Rates Trading Down Under 1.70! (Matthew Vassallo)

GBP/AUD rates have dropped below 1.70, with the AUD making inroads despite some positive Manufacturing & Construction data for Sterling  this week.

The Pound has found a lot of resistance around the current levels and despite a move through the 1.70 threshold, it has retracted quickly and once again proves how fragile the UK economy remains in the minds of investors.

The Pound has recovered slightly over the past 24 hours but I would be wary about assuming that we will see an aggressive move up for sterling under current market conditions. We need to consider that the on-going Brexit scenario is likely to drive the markets and in particular Sterling’s value, for months if not years to come.

This will make any sustainable Sterling improvement hard to come by and for this reason I would not be prepared to sit back and gamble on where the Pound may be sitting after March, when Article 50 is finally triggered.

UK Prime Minister Theresa May has given little away in terms of how we will facilitate our exit from the EU and this means the market are having to second guess, whilst trying to prepare for almost any eventuality. This uncertainty is hardly likely to breed confidence in the UK economy and as a result Sterling’s value is likely to be restricted.

However, this does not mean that those clients holding AUD should assume that GBP/AUD rates will plummet, as much of this negative feeling has been factored into the current exchange rates. The Australian economy is facing problems of its own and with a downturn in economic data and growth forecasts for this year and 2018 being squeezed, there is, in my opinion too much uncertainty to gamble on a move back towards 1.60.

We also need to consider the fact that the AUD is a commodity based currency and as such, is heavily reliant on the global economy performing well. Any downturns can have severe consequences on the currency in question, which is one of the reasons we see bigger swings on GBP/AUD than we would against some of the other major currencies.

Looking ahead and we have Services data out for the UK tomorrow, which could have an impact on the rates depending on whether the figure released is outside of the expected remit. There is also Trade balance figures and Import/Export data released on Friday in Australia, so expect further movement on GBP/AUD rates before the week is out.

If you have an upcoming GBP or AUD currency transfer to make we can help you time your transfer to maximise the market value available, whilst always ensuring you received the best rates available under any market conditions. We have a team of experienced brokers who can monitor the market for you ahead of your trade, so please feel free to contact us on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, you can email me directly on mtv@currencies.co.uk