Category Archives: Australian Dollar Weakness

RBA Interest Rate Forecast vital to AUD value (Daniel Johnson)

NAB predict Rate Hike as early as August

The National Australia Bank (NAB) has a very optimistic forecast in regards to rate hikes by the Reserve Bank of Australia (RBA). They are a minority. They are of the opinion we could see an interest rate hike by 0.25 basus points as early as August.

“The RBA has indicated that it is in no rush to raise rates in lock-step with global central bank counterparts. However, lower unemployment, and evidence of wages growth moving upwards — even gradually — should be enough to give the RBA confidence that inflation will eventually lift above the bottom of the band,” said Alan Oster, NAB Chief Economist.

“We continue to forecast two 25 basis point rate hikes in August and November, although acknowledge the risks are that these hikes could be delayed.”
Oster attached a couple of warnings which could change the RBA’s decision, noting that a slowing in household credit and house prices due to macro-prudential measures implemented by APRA “may help alleviate some concerns about household debt”.He continued “higher AUD may also threaten this outlook although our revised forecasts are for the currency to be 75 US cents by year end”.

Personally I do not share his view. I think a hike by August is very optimistic and economic data is not consistent enough to warrant a hike . Inflation is some way from where it needs to be and there is no reason to suggest there will be a rapid rise between now and August. This a viewpoint shared by the man that counts. RBA Governor, Philip Lowe who recently stated the following.

“further progress in reducing unemployment and having inflation return to the midpoint of the target range”, adding that it was “likely that the next move in interest rates in Australia will be up, not down”.

He also said “while we do expect steady progress, that progress is likely to be only gradual.

The general consensus is there will not be a rate hike until at least early 2019.

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.

Will Australian Unemployment data send GBPAUD rates towards 1.80? (Tom Holian)

We are in for a big end to the week for anyone looking to transfer Australian Dollars as tomorrow brings with it a number of economic data releases down under.

We start tomorrow with the latest Unemployment figures for January as well as the Participation Rate which rose last month showing a small slowdown in Australia and this has weakened the AUD vs GBP following last month’s announcement.

I expect another slightly negative release for Australia overnight and I think this could provide the Pound with some support vs the Australian Dollar sending GBPAUD exchange rates in an upwards direction.

The Australian Dollar has remained under a lot of pressure against Sterling since the start of the year as the Australian economy has shown signs of a slowdown with the RBA unsure about what to do with monetary policy.

Inflation levels are very different from the west to the east coast and so a change in interest rates will not necessarily be of benefit to the whole country which is why the RBA are likely to keep interest rates on hold.

Meanwhile, the UK have hinted that the next interest rate hike may be coming in May and this is why I think we could see GBPAUD rates heading towards 1.80 before the end of the month. We end the week with RBA Governor Philip Lowe addressing the market so make sure you’re prepared to move quickly.

If you’re in the process of looking to transfer Australian Dollars and would like to save money compared to using your own bank then contact me directly for a free quote.

Having worked for one of the UK’s leading currency brokers for 15 years I am confident not only with being able to offer you better exchange rates but also help you with the timing of your trade.

For further information or a free quote email me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk 

AUD Forecast – UK Foreign Secretary Boris Johnson Speaking Today (Matthew Vassallo)

GBP/AUD rates have remained flat overnight, as the markets turn their attention towards today’s speech by UK Foreign Secretary Boris Johnson.

The speech is expected to outline the governments vision to untie both the Leave & Remain camps and whilst it has been sanctioned by No 10, Boris has a tendency to deliver the unexpected.

The speech is likely to have strong undertone but it is no secret of Boris’s political ambition and any indication of a fractured government, or disjointed approach to the Brexit talks, could put pressure back on the Pound.

In truth, Sterling has held its positions against the AUD better than it has against many other major currencies, with GBP/AUD rates continuing to float around 1.77.

Commodity based currencies such as the AUD are often considered riskier currencies for investors. This means that at time of global prosperity when investor confidence is high, funds will be moved away from the safer haven currencies such as the USD or CHF and into these potentially higher yielding ones.

Whilst there is no direct correlation to the currency markets, last week’s downturn in the global stock markets has seemingly sapped investors risk appetite and as such this is likely to put pressure on commodity based currencies such as the AUD.

Whilst there are many external factors to consider, this is one of the reasons why the AUD is struggling to make much of an impact against GBP, despite the currency uncertainty engulfing the UK economy.

If you have an upcoming GBP or EUR 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 inning 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.

Consumer confidence and unemployment the key data over the coming days

Tomorrow we have the release of the Westpac Consumer Confidence reading, Consumer Confidence is a measure of sentiment that individuals have in economic activity, and is a really good overview of how the general consumer is feeling about their economic situation. A higher reading would be good for the Australian Dollar as it suggests that Consumers may be ready to spend more, and a lower reading would usually weaken the Australian Dollar as it suggests that people have less disposable income in their pocket to spend on goods and services.

On Thursday we will also see the release of unemployment figures for Australia, with expectations of unemployment to have dropped from 5.5% to 5.3% which would be a strong figure. The RBA (Reserve Bank of Australia) had lowered their unemployment expectations recently to 5.25% for the year ending June 2018 so this figure would fall in line with the RBA’s predictions and may give the Australian Dollar a good solid Thursday should this come out as predicted.

For those with a currency exchange to carry out involving the Australian Dollar in the coming days, weeks or months you must also be wary that the figure may come out worse than expected, for example should the figure remain at 5.5% or only come down to 5.4% then we may witness Australian Dollar weakness as we head towards the end of the trading week.

We do have a flurry of inflation data out tomorrow afternoon from the U.S which can impact Australian Dollar rates due to the flow between the Australian Dollar and U.S Dollar, anything positive for the U.S can generally weaken the Australian Dollar at present, as it heightens the chance of an interest rate hike in the States.

If you need to carry out a currency exchange involving the Australian Dollar and you want to achieve the best rate of exchange, along with help on timing your transfer. You are welcome to contact me (Daniel Wright) the creator of this site on djw@currencies.co.uk and i will be more than happy to speak with you personally to help with your situation.

Inflation to influence GBPAUD exchange rates

Tomorrow morning the UK will release their latest inflation numbers and a slight fall is to be expected. Normally a slight fall would lead to a weakening pound however I expect a fall in inflation could strengthen the pounds position against the Australian dollar. My reasoning is that the Bank of England last week announced they expect inflation to fall and wage growth to rise, which will lead to an interest rate hike. The release is at 9.30am for further information in regards to the inflation release feel free to email me on drl@currencies.co.uk.

Later in the week (Wednesday) Boris Johnson is set to address the public in regards to Brexit. The aim of the speech is to unite remain and leave voters. Past history leads me to think that Mr Johnson may go off topic, especially if he is asked about Michel Barnier’s comments last week. For clients buying Australian dollars with pounds, I would be tempted to take advantage after the inflation numbers and not wait for Mr Johnson’s speech.

Economic data releases are thin for Australia until Thursday at 1.30am in the morning. Unemployment and employment change numbers are to be released. Unemployment numbers are set to fall to 5.3%, which is fantastic for the Australian economy. Employment change numbers are set to show a slight decline however I expect the Unemployment numbers to outweigh the employment change numbers, therefore I expect a positive morning for the Australian dollar.

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 liable to global stock market sell off and RBA warning leads to Australian Dollar weakness

The Australian Dollar has had a fairly choppy week so far this week, generally losing ground against most major currencies due to comments from the Reserve Bank of Australia that indicated that any interest rate hikes may be quite far away, and also due to global uncertainty in the stock market, seeing the Dow Jones and other indexes around the world drop considerably over the week.

The issue with the Australian Dollar is that it is perceived as a riskier currency, therefore when you tend to see a volatile global market, and uncertainty politically or with economic data  around the world you tend to see the Australian Dollar weaken, as investors will shy away from riskier currencies and head to safer havens, such as the U.S Dollar and the Swiss Franc.

As I indicated earlier in the week I do feel that the Australian Dollar may have a tough period coming up, with interest rates due to be raised by various central banks around the world this may lead to a further flow out of the Australian Dollar and into more attractive currencies with better returns on investment.

The RBA also released a monetary policy statement last night, and although economic data is still fairly good there are concerns around slowing wage growth and inflation rising too.

Poor wage growth and high inflation is a big issue for an economy, as it means the cost of goods and services is going up yet the amount the general consumer has to spend is not rising in line with it, another potential issue for the Australian Dollar going forward.

Not only do we offer up to date market information for our readers but we can actually help you with any currency exchanges too, with top foreign exchange rates and a smooth and efficient service. With over ten years of experience in foreign exchange I would like to think I could be an excellent addition to your armoury when taking on these volatile markets. Feel free to contact me (Daniel Wright) directly on djw@currencies.co.uk and I will be more than happy to help you personally or to get you a live quote.

BOE comments causes Sterling Spike (Daniel Johnson)

GBP/AUD – In Depth

Sterling has struggled against the Aussie following the decision to hold a referendum to leave the EU. GBP/AUD sat above 2.20 pre referendum and of late has been mired in the 1.70s. We have seen a recent spike for Sterling which can be atributed to several contributing factors.

Although there was a recent surge in retail sales figures from down under the spike for the Australain Dollar did not last long, as predicted it was an an anomamly that could be put down to Black Friday sales and the release of the iphone X.

Since then the Reserve Bank of Australia (RBA) have indicated that they will keep interest rates on hold for the considerable future the Aussie has lost value. This can be justified due to the infalted property prices in high wage growth areas. Foreign investors are willing  to pay these prices as investments but it is causing the locals to struggle spending the majority of their funds on neccesities rather than luxury goods. This does not bode well for the Aussie.

The recent surge to 1.79 was caused by hints from the Bank of England (BOE) there could be a rate hike as early as May 2018. The market moves on rumour as well as fact and investors bit.

It is important not to have too high expectations if you are an AUD buyer however, the uncertainty surrounding phase two of Brexit talks has the potential to hurt the pound. Davis and Barnier are far from being on the same hymn sheet.

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.

 

 

Where Next for the Australian Dollar – Stock Market Crash Impact (James Lovick)

The Australian dollar has seen a very volatile week with lots of events happening globally since Monday which have had a direct and considerable impact on the strength of the Aussie. The Australian dollar has come under pressure after $66 billion was wiped off Australian shares earlier in the week following a global sell off with considerable losses also seen in the US and UK stock markets.

The Australian dollar which is regarded as a commodity currency normally comes under pressure in times of global uncertainty and this happening again now. This new wave of uncertainty in the global economy could see further problems for the Australian dollar and the Aussie may have further to fall.

However the Reserve Bank of Australia may intervene before that happens and any signal from the central bank that it is keen to raise interest rates later this year could see the dollar bounce back. Clients looking to buy Australian dollars are seeing some excellent buying prices which have stemmed from the perceived extra global risk and there may be some more gains to be had in this rally. Any further shocks from the US are likely to result in further weakness for the Aussie.

GBP AUD

Rates for GBP AUD have seen a good week with levels for this pair now sitting at around 1.77. The Bank of England meet tomorrow to discuss interest rates and any change in policy could see movement for sterling exchange rates. The Bank of England Governor however is more likely to cause a market reaction on the back on any commentary on Brexit. The central bank is unlikely to make any changes to interest rates although any suggestion that there is likely to be a rate increase later this year should help support the pound.

Clients looking to buy or sell Australian dollars would be wise to get in touch to take advantage of any spikes in the market which si something we can help you with. Please feel free to get in touch with me at jll@currencies.co.uk

Interest Rates in the UK and Australia to set the tone for GBPAUD exchange rates – Could we see GBPAUD rates move towards 1.80? (Tom Holian)

According to the Reserve Bank of Australia interest rates down under may be kept on hold for quite some time. In their most recent statement earlier this week the central bank has suggested that any change will be ‘gradual.’

The latest set of growth forecasts from the RBA will be announced on Friday and although unemployment is looking very strong in Australia there are concerns being raised that Retail Sales are struggling.

Indeed, the RBA governor Philip Lowe has said that ‘household incomes are growing slowly and debt levels are high’, which leads me to think the RBA will keep monetary policy the same until we see more positive news.

The last time we saw an interest rate hike in Australia was back in 2010 and rates have remained on hold down under now for a year and a half so don’t expect any rate changes to be coming anytime soon.

The problem for the economy in Australia is that over the years it has benefited from a higher yield in interest rates for global investors than many other developed economies.

However, with the US having increased interest rates three times during 2017 and on course to increase interest rates again in March this is leading investors to move their money away from commodity based currencies including the Australian Dollar and into the US Dollar.

Overall this is fairly good news for anyone looking to send money to Australia as it means GBPAUD exchange rates have remained positive recently and although we have seen the odd drop in rates, generally speaking the direction has been positive in Sterling’s favour.

Looking ahead to tomorrow the Bank of England are set to meet to announce their latest monetary policy decision and although no change is expected any hints of a rate hike coming further down the line to control inflation could see the Pound go in an upwards direction.

If you have a need buy or sell Australian Dollars in the near future then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

Bet against the Australian Dollar in 2018? It appears many are doing just that!

The Australian Dollar has not had the worst start to 2018 but it does appear that many major banks and institutions are not expecting AUD exchange rates to have such a good year.

We must be wary that we have seen this a couple of times over the past few years with the vastly predicted Chinese slowdown that still does not appear to have come along.

This time however there are multiple sources out there suggesting a drop in value and the reasons are far more justified and likely. The RBA appear to be holding off on any rate changes for the first part of 2018 compared to various other economies around the world looking to raise rates. An interest rate hike is generally seen as positive for a currency so this may lead to money moving out of the Australian Dollar and into more currencies such as the USD should the States raise rates numerous times in 2018.

There is an expectation of commodity prices dropping off throughout 2018 too, with Iron Ore being one of the most notable for the Australian Dollar, with this being one of the larger exports for Australia this is expected to impact export income which may have a knock on effect to the economy.

Finally, Morgan Stanley have also been advocating that clients should consider taking a position for the Australian Dollar to lose ground against the Euro and many others have commented that losses against the Dollar have been spoken about by various financial institutions.

In my opinion I would not be surprised to see Australian Dollar exchange rates to have a fairly poor year, however we do need to also remember that the Australian Dollar does appear to have a fairly strong backbone and the RBA can change their stance regularly so this is still very much a currency to watch very closely.

Currency exchange to make in the near future?

If you need to make a large exchange, involving the buying or selling any major currency then it is key that you get in touch with us to see if we can save you money. This site has been running for over 7 years and I have personally dealt with thousands of new clients that have found they can get a better rate through us rather than their current brokerage, we like the think the service is much better too.

If you would like a quote or to discuss plans for a future transaction then you are welcome to contact me, Daniel Wright, the creator of this site personally. You can email me on djw@currencies.co.uk with a brief description of your requirements and I will be more than happy to get in touch with you to run through exactly how I can help and what rates we can offer.