Category Archives: Australian Dollar Weakness

Australian Dollar exchange rates have a volatile 24 hours – Lowe sees a bright outlook (Daniel Wright)

The Australian Dollar has had a fairly turbulent time over the past 24 hours, with fairly large swings against most major currencies.

Leading up to the Federal Reserve interest rate decision over night the Australian Dollar initially gained ground. Janet Yellen, Chair of the Fed then announced that the U.S will aim to start cutting back its QE (Quantitative Easing)  program and that they still plan on an interest rate rise in the coming months.

This led to a little USD strength and weakness for the antipodean currencies (AUD,NZD and ZAR) as we saw investors shift funds out of riskier currencies and into the Dollar following this slightly more positive news.

Earlier today we then saw Governor of the RBA Philip Lowe comment to the American Chamber of Commerce in a speech he called ‘the next chapter’. Lowe was fairly positive about the economy going forward and this gave the Australian Dollar a minor boost back once again in a volaitle period for those that have Australian Dollars to buy or sell in the coming days, weeks or months ahead.

For anyone with an interest in GBP to AUD or AUD into GBP you should be aware of Prime Minister Theresa May speaking about Brexit tomorrow which may lead to a particularly volatile day for the Pound.

If you have a pending currency exchange to carry out in the coming days, weeks or months then it would be prudent to get in touch with me directly no matter who you were planning to use. I have had thousands of people contact me through this blog over the years that had planned to use their bank or their current broker and the vast majority have ended up using our company instead due to better exchange rates and a smooth and efficient customer service.

If you would like to get a free, no obligation quote to compare against what you are currently being offered then you can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of your needs and I will be more than happy to contact you personally.

Will the GBPAUD rise back to 1.70?

The pound has slipped below the 1.70 mark we briefly touched as investors initial excitement at the prospect of a UK interest rate hike begins to fade. The pound soared last week breaking the 1.70 mark but this was not sustainable, the Australian dollar has been much weaker too but we have seen it regain some strength back too. With almost 5 cents improvements from the worst rates in a very short space of time there are some very good arguments for buying Australian dollars with pounds at present, however there is more important news this week that could influence the rates.

A more optimistic tone from the Reserve Bank of Australia’s Minutes released this week also predicted two hikes in 2018 and talked of the recent highs in Iron Ore prices, all positive news that has helped the Aussie. This is all in contrast to last week when a board member Harper stated he felt that there was little the RBA could do and that the main driver on the AUD was movements on the US dollar.

Big news this week will be the US Federal Reserve Interest rate decision this evening. There is a very strong relationship between the US dollar and the Australian dollar, investors will essentially look to capitalise on the stronger interest rates in Australia but with the US also on a path to raising their own interest rates we could easily see big swings.

Governor Philip Lowe is also due to speak tomorrow and his comments will be watched closely for signs of how he views the possibility of raising interest rates. Friday we have a very important speech from Theresa May in Florence on Brexit which could really see the pound stronger if as expected she indicates a commitment to paying some form of Brexit bill.

GBPAUD is much improved and may well rise higher but it would be a shame for Aussie buyers to miss out on the current much higher rates. If you have a transfer to make and wish to get some extra information to help make a decision on an exchange please contact me Jonathan watson by emailing jmw@currencies.co.uk.

Pound hits best level against the Australian Dollar since July (Tom Holian)

The Pound has hit its best rate to buy Australian Dollars since early July after the Bank of England voting 7-2 in favour of keeping interest rates on hold this month.

Clearly there is a sustained appetite for raising interest rates in the UK and with inflation rising as shown on Tuesday the typical decision to combat rising inflation is to increase interest rates.

Bank of England governor Mark Carney has now suggested an interest rate hike may be coming but did not say when. He went on to claim that with UK economic growth better than expected combined with record low levels of unemployment the UK could be facing an interest rate hike sooner than the markets currently expect.

We saw huge jumps for GBPAUD exchange rates towards the end of last week following Thursday’s meeting and I think we could see further gains into the early part of next week.

Theresa May is also set to address the markets next Friday when she visits Florence to set out her goals for a post-Brexit Britain and about the UK ‘leaving the EU but not leaving Europe.’

Therefore, we could see a huge amount of volatility next Friday so if you’re concerned about a lot of movement and just want to get something arranged prior to this date then contact me directly for a free quote.

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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Will GBPAUD hit 1.70?

Expectations for the GBPAUD rate to keep rising seem now linked inextricably to the likelihood of the UK raising interest rates. GBPAUD rose yesterday from 1.62 to now near 1.66 as markets believe there is an increased likelihood the UK will raise interest rates to combat rising Inflation. The Australian dollar has been performing quite well itself, in the short term this could be a spike to be seriously considering for AUD buyers.

Looking further at what we can see ahead for the UK and the pound this morning’s Unemployment data at 09.30 am UK time and tomorrow’s UK Interest rate decision are the key pieces of news to monitor for movements on GBPAUD. Should the Bank of England acknowledge that improving Inflation is a cause for concern and the market detect signals of a rate hike sterling could well have another good couple of days.

I don’t actually think we will see any UK interest rate hikes for quite some time, the rising Inflation was actually caused by increases in the price of clothes and shoes. I fail to see how this will really be enough of a trigger for the Bank of England to actually go ahead and raise interest rates but nevertheless the speculators will probably seek to push the market higher as a consequence.

If you are buying or selling Australian dollars with pounds this latest movement has presented some excellent short term opportunities. The outlook for sterling remains mixed so making plans around potential spikes is key to maximising your exchange rate. We aim to ensure out clients are totally informed of all the latest trends, news and themes to help them make an informed choice about what is the best way forward.

Fore more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk. Thank you for reading and I look forward to hearing from you and assisting in the future.

Sterling rallies against the Australian Dollar after UK Inflation Data (Tom Holian)

The Pound made some surprise gains vs the Australian Dollar during today’s trading session with the announcement of the latest UK inflation data.

The latest measure showed an increase to 2.9% and this could put a small amount of pressure on the Bank of England when they meet to discuss their latest monetary policy on Thursday.

The chances of an interest rate hike as far as I’m concerned is a long way from happening and rumours are that we won’t see a rate hike until 2019. However, if inflation continues to rise in the UK then this could see a rate hike being brought forward.

Tomorrow morning UK unemployment figures come out followed by Average Earnings. With the disparity between average earnings and inflation this could potentially cause today’s gains to be eroded.

Therefore, if you’re in the process of making a currency purchase involving Australian Dollars then make sure you keep a close eye out on the UK’s economic data in the morning.

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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Sterling gets much needed boost against the Australian Dollar (Daniel Johnson)

Brexit vote boosts the Pound

Sterling has strengthened against the Aussie following what Theresa May called a “historic decision to back the will of the British people.”

Parliament passed a vote to accept some European law which is progress in regards to Brexit negotiations. GBP/AUD has now risen to 1.64. Brexit is a key factor in the value of the pound and the current level uncertainty has made investors reluctant to move to the pound. This spike is certainly welcome.

Inflation key to Interest Rate levels in the UK

The question is will this rally continue?  We have CPI data this morning which is a measure of inflation based on the price changes of goods and services. This is being very keenly watched by investors and market analysts alike. Inflation has seen a rapid rise in the UK this year at one point hitting 2.9%. There were rumors if it continued to increase the Bank of England could hike rates. The next results showed a fall to 2.6% , and today’s figures are expected to come in at 2.8% which could again put a rate hike on the cards and boost Sterling value.

I am of the opinion a rate hike is not a solution to the problem and that in order to solve the inflation problem we need clarity on Brexit and a stable government. The rapid rise in inflation is a direct result of Brexit and the weak value of the pound, goods are now more expensive to purchase from business and that increase is being passed on to the consumer. If average wage growth does not keep up with inflation the economy could be facing serious problems. average wage growth is currently some way behind inflation at 1.8%. The new figures are released tomorrow. Inflation and average wage data could well influence the interest rate vote by the MPC on Thursday. There is definitely the possibility of volatility.

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 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 fall below 1.60?

The pound might well easily fall below 1.60 in the future as global conditions continue to favour the current trends we are witnessing on the currency pairing. Expectations for the pound remain confined to the uncertainty over future direction on the Brexit which does not look like being resolved any time soon. If you look at the timelines we have until 2019 for a deal to be arranged for the UK. Of course there is lots to sort out but it is more than likely the negotiations will go down to the wire.

Next week is a very important one for Australia with the latest Unemployment data released. This data has so far been a key indicator as to the strength of the Australian economy and therefore the Australian dollar. If you need to buy Australian dollars this release next week will be the key point of information to be focusing on.

Markets will move for a whole range of reasons, movement on the AUD is further complicated by its relations to international events which influence global attitudes to risk. Generally speaking markets are volatile with a number of key developments with North Korea and the United States. Such concerns can weigh on the Australian dollar which may see some big unexpected swings.

Overall the weakness of sterling seems like it will continue to drag the pair down, the improving and consistent economic picture in Australia should help this trend further. Rates below 1.60 seem a very real possibility in the coming weeks and months. There does remain however the very real possibility events like North Korea shake markets and we see the Aussie suffer.

If you have a transfer to make in the future please speak to us today to learn of the latest news and events in the future that could move your rates. Please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

 

GBP/AUD Touches On 20 Day High (Ben Fletcher)

The Sterling Aussie rate jumped to 1.638 at the high of today and there could be optimism of further gains over the next few weeks. Sterling having struggled over the past few months has made some of it’s largest gains against the Aussie today. There had been optimism that the Reserve Bank of Australia would start to consider rate hikes but judging from the latest comments following the RBA’s decision earlier this week, there inst going to be a rate hike till late 2018 at the earliest.

Philip Lowe who is the Governor of the Reserve Bank suggested that it would not be in the public’s interest to consider a rate cut as it would make borrowing even cheaper. The Australian economy like much of the world has a major borrowing culture which has seen a over inflated housing market that the RBA seems to have finally got a hold of. If the Reserve Bank of Australia manage to encourage inflation to pick up then the RBA could be swift to act on a rate hike which would strengthen the AUD significantly. In my opinion neither currency is going to make major gains against the other over the next few months. The GBP/AUD rate has remained range bound just above the 1.60 level and any movement towards the 1.65 level should be considered a rate to capitalise on.

If you do have a upcoming currency requirement and would like to discuss what might be the best option, please send me an email to Ben at brf@currencies.co.uk. The currency markets are always moving and timing a transfer can help make sure you achieve the most for your funds. Working for a brokerage I am able to help you achieve the best rates of exchange and set alerts to make sure you capitalise on any movements on your favour.

GBP/AUD – Australian Dollar Strength could spell trouble for exports (Daniel Johnson)

Positive Data from down under could warrant rate hike

The Australian economy has been performing well of late with strong economic data in abundance. We recently saw a release of manufacturing data which showed the highest levels since 2002.  I has been a volatile time due to the recent Nuclear missile test by North Korea over Japan with investors seeking out safe haven currencies due to the threat of conflict.

Poor non-farm payrolls data from the US caused many to leave the greenback, moving to the Aussie with increased risk appetite and the promise of higher returns. With strong economic data out of Australia it could be argued an interest rate hike is on the cards. Philip Lowe however, The head of the Reserve Bank of Australia (RBA) is nervous of the Australian Dollar becoming too strong. Australia is heavily reliant on the Chinese buying it’s raw materiel, particularly iron ore. Iron ore is Australia’s biggest export and has seen a rise in value of late. If goods become to expensive sue to the value of the Aussie this could force the Chinese to look elsewhere. I would imagine the RBA will attempt to talk down the value of the currency through jawboning rather than any drastic changes to monetary policy. Jawboning is a very difficult technique and savvy investors do not always take central banker’s words as gospel.

The pound is in a terrible spot at present. There are two key factor anchoring Sterling. First, political uncertainty. Political uncertainty historically weakens the currency in question and this is what we are witnessing with the pound. With Theresa Mays’s position in doubt due to threats from her own party the pound has little chance of recovery. Next up, Brexit, there is no clarity on the UK’s stance and there is conflict between UK negotiators and Brussels over payment of the proposed exit bill. Bad news is better than no news on the currency market which is why GBP/AUD still sits in the low 1.60s.

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 outlook is so bleak for the pound . 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.

Sterling Gives Back Gains Against Aussie (Ben Fletcher)

The GBP/AUD rate moved back above 1.63 this week however as the end of Friday approaches most of the gains have now been given up, leaving the rate in the low 1.60’s. This week there has been significant movements across global trading due to perceptions of risk and reward being brought into questions. The flair up once again of the US and North Korea episode saw investments fall back into the US Dollar leaving the likes of the riskier Aussie Dollar. However towards the end of the week as the story falls off the front pages the Australian Dollar has gained back any lost ground.

Moving forwards I think there will be more weakness in the Aussie for the reason, as we certainly haven’t seen an end to the unrest in Korea. Most of the provocations have taken place over the weekend so it wouldn’t be surprising if when we come back on Monday there has been a movement back above 1.63.

RBA Next Week on Tuesday

The Reserve Bank of Australia will provide their latest insights into the economy with a interest rate decision, this in my opinion is going to be a non affair. The rhetoric that follows could be interesting though as the RBA only a few months ago suggested they expect to see the rate increase from 1.5% to 3.5% in the next few years. At the moment inflation isn’t rising fast enough to commit to this and we could see some back tracking, which could see the Aussie lose ground.

If you do have a question with regards to my forecast please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at brf@currencies.co.uk