Category Archives: Australian Dollar Weakness

GBP to AUD Rate Gains Ahead of Australian Unemployment

The GBP to AUD interbank exchange rate has gained in the last day, in part ahead of Australia’s unemployment statistics for December, released this Thursday 23rd at 00.30 GMT.

It’s forecast that joblessness Down Under rose by 0.1% last month, up to 5.3%, while Australian companies are predicted to have created just 15,000 new positions, from November’s 39,900 gains.

If these forecasts are accurate, they would suggest that Australia’s job market has slowed, further away from the Reserve Bank of Australia’s (RBA) target jobless rate of 4.5%.

This, combined with Australia’s ongoing bush fires, may convince the RBA to cut interest rates below their current 0.75%, when the central bank next meets on February 4th. Historically, lower interest rates tend to weaken the value of the AUD.

Looking Ahead


Another factor why the sterling vs Australian dollar interbank exchange rate has gained, is because there have been reports of a new coronavirus in China, Australia’s closest trading partner.

Seemingly, over 200 people in the southern city of Wuhan have been struck by a similar type of virus to the SARS that killed 700 people in 2003.

This has weakened the Australian dollar, because if China imposes a quarantine, and bans China’s citizens from travelling abroad, then fewer Chinese tourists could visit Australia this year. Chinese visits are a significant driver of Australia’s tourist industry.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me, Daniel Johnson directly at dcj@currencies.co.uk.

Sterling vs Australian Dollar Rises as RBA Forecast Interest Rate Cut in February

The pound to Australian dollar exchange rate stands at 1.8853 today. By comparison, yesterday, sterling was as low as 1.8774 versus the so-called Aussie, so it’s since strengthened by 0.42%, or over 0.75 cents.

The GBP to AUD interbank exchange rate has strengthened overnight, in part because the Reserve Bank of Australia (RBA) is being increasingly tipped to cut Australia’s interest rates in the coming weeks. In particular, it’s thought that the RBA may reduce Australia’s borrowing costs from their current 0.75%, down to a new all-time low of 0.5%, at the central bank’s next meeting on February 4th. This is because, for several weeks now, bush fires have ravaged significant parts of Australia’s territory, destroying thousands of homes and costing dozens of lives. So while the authorities seek to control and alleviate this natural disaster, the RBA might cut Australia’s borrowing costs, to support the economy. However, lower interest rates tend to weaken the value of the AUD.

GBP to AUD Higher, Even as UK Inflation Weakens in December

The sterling vs Australian dollar interbank exchange rate has risen, even though the UK’s inflation rose less than forecast in December, according to official statistics released today.

UK price pressures increased by 1.3% last month, said the Office for National Statistics (ONS) today, below forecasts for 1.5%, as well as increasingly below the Bank of England’s (BoE) official target of 2.0%. Low price pressures tend to point to a sluggish economy, so this may affect the value of sterling, looking ahead.

Lower UK Inflation Adds to BoE Case to Cut, Might Impact Sterling

In particular, today’s low UK inflation figures add to the BoE’s mounting case to cut UK interest rates. Since last Thursday, central bank Governor Mark Carney, as well as his colleagues Silvana Tenreyro and Gertjan Vlieghe, have all suggested that they might vote to cut Britain’s borrowing costs, if the economy doesn’t pick up in early 2020.

Already at the BoE’s interest rate decision in November, Michael Saunders and Jonathan Haskell both voted to cut UK borrowing costs.

So if three more members join them, of the BoE’s nine-person Monetary Policy Committee, this raises the possibility that the central bank may lower UK interest rates below their current 0.75%, to 0.5%, in the foreseeable future. This too could impact the pound.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Positive Turnaround for the AUD Eases off RBA Cuts in February as GBP Awaits Economic Data

The Australian Dollar has taken a turn for the better as the new week gets underway. Recent performances from AUD have been lacklustre and paired with the ongoing bushfires that engulf the countries resources, Australia did not start the year on the front foot. However, it now appears that AUD could be getting back on the right track as both retail sales figures and global factors come in to support the currency. Meanwhile, GBP awaits important data which is due to be released this week. The first will come today in the form of November’s GDP number. Investors will be hoping for positive data as the BoE upped the ante on the potential of a rate cut for GBP in the future, but the Sterling isn’t priced for a rate cut any time soon.

AUD Picks Itself out of Poor Performing Run Thanks to Retails Sales Figures


AUD has been under pressure lately, both from poor economic data and the bushfires which are ongoing throughout the country. The fires have taken a huge amount of the countries resources and have diverted these resources from their usual pathways which is likely to influence Australia’s economic figures. Luckily, AUD received positive news in the form of November’s retail sales. The figures showed a strong 0.9% rise for the month. This beat the expectations which were set at 0.4%. The data came as a broad-based rally in global stock and commodity markets, which usually has a beneficial supportive environment for AUD. The comeback from AUD saw the GBP/AUD exchange rate slip as AUD edged up on GBP. However, recent reports have suggested that the economic impact of the bushfires has been significant enough to seriously consider an interest rate cut, this boosted the odds of a cut up to above 50%.

GBP Waits on Important Economic Data Which Could Settled the Score With AUD Rates


As AUD performed and edged up on GBP, the UK sat awaiting its run of important economic data which is set to be released this week. The first, which will come later today, is the November GDP figure. The consensus is expecting a second consecutive 0% change for November, which would see the UK economy across the halfway line of Q4 without making any growth at all. Furthermore, Wednesday and Friday will see the UK’s inflation and retail sales data released. These figures will be important for the strength of the GBP as Boris Johnson moves forward with his Brexit negotiations.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

GBP to AUD weakens, as US/Iran Military Conflict Cools

The sterling vs Australian dollar interbank exchange rate has weakened by almost one cent in the last day, or by 0.49%, from a peak of 1.9154 yesterday to 1.9061 today at the time of writing.

The pound has weakened against the so-called Aussie dollar, partly because the United States’ and Iran’s military skirmish appears to have cooled down.

Last Friday 3rd January, America announced that it had killed Irani General Qasem Soleimani, and yesterday Iran responded by striking two US military bases in Iraq.

However, following these attacks, US President Donald Trump has tweeted that Iran “appears” to be standing down, adding that “All is well!” In particular, this is because no American personnel died in yesterday’s Irani strike.

De-Escalation of US/Iran Conflict Benefits Aussie, as a Commodity Currency

This has strengthened the Australian dollar, in part because the AUD is what’s called a “risk currency”. This means that, when the global geopolitical situation is tense, the Aussie dollar tends to weaken, and when tensions cool, the Australian dollar rises again.

This is because Australia exports vast quantities of commodities, such as iron ore and coal. So Australia’s economy is sensitive to worldwide military events, and its currency too. As a result, yesterday’s seeming truce between the USA and Iran has lifted the AUD.

AUD might be influenced, as bush fires continue Down Under

However, looking ahead, bush fires continue to ravage millions of acres of Australian land, destroying thousands of homes and killing dozens of people so far.

It’s thought that this may weaken Australia’s economy, as the country attempts to control the blazes, and households and businesses respond by spending less.

Moreover, the Reserve Bank of Australia (RBA) looks likely to cut interest rates in February, below their current 0.75%, to try and support Australia’s economy during this natural disaster. This may affect the value of the AUD, looking forward.

Turning to the UK, sterling is being supported by hopes for a compromise approach to Great Britain’s and Europe’s future trade deal negotiations.

In addition, this morning Bank of England Governor Mark Carney will deliver a speech, in which he may discuss the outlook for UK interest rates and monetary policy. The speech could be worth watching, for its effect on the GBP to AUD interbank exchange rate.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk

GBP to AUD Strengthens on Talk of RBA Interest Rate Cut in February

The pound to Australian dollar interbank exchange rate stands at 1.9139 today. This is its highest in three weeks, or since December 18th 2019.

By contrast, back on December 23rd, sterling was as weak as 1.8669 versus the so-called Aussie. So it’s since strengthened by 2.51%, or by over 4.5 cents.

One partial explanation why sterling’s value versus the Australian dollar on the interbank market has strengthened, is because the Reserve Bank of Australia (RBA) is being tipped to cut interest rates in February, below their current 0.75%.

This is because Australia is experiencing intense bush fires, burning millions of hectares of land and destroying hundreds of homes.

As a result, the RBA looks likelier to reduce borrowing costs, to shore up Australia’s economy during this natural disaster. Traditionally, lower interest rates tend to weaken the value of the Australian dollar.

Sterling Strengthens as UK Services PMI for December Upgraded


The GBP to AUD interbank exchange rate has risen, in part because the UK’s services sector performed better than previously thought in December.

According to watchdog IHS Markit’s revised PMI (Purchasing Managers’ Index) yesterday, UK services activity was lifted to 50.0, from the previous “flash” estimate of 49.0.

This 50.0 is exactly the figure that separates economic growth from expansion, so tells us that UK services stagnated in December, rather than shrinking. This has lifted sterling’s value versus the Australian dollar.

GBP to AUD Might Be Affected by UK and Australian Economic Data


Turning to the rest of this week, the sterling vs Australian dollar interbank exchange rate could be affected, both by UK and Australian economic releases.

In the UK, the British Retail Consortium (BRC) releases its UK retail sales figures for December this Thursday 9th January, at 00.01 GMT. In November, UK retail sales fell by 4.9%, so we’ll see if sales improved over Christmas, which might affect sterling.

Meanwhile, Australia’s economic data includes building permits for November, released on Wednesday 8th at 00.30 GMT and forecast at 0.4%. Also, Australia’s trade balance for November is made public on Thursday 9th at 00.30 GMT, and predicted at AU6,100 million.

If these data exceed or disappoint expectations, it may affect the Australian dollar, alongside the developing bush fires.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Australian Dollar Looks to Finish the Year off Strong With Help From China

The Australian Dollar has surprised many over the festive period, with a sharp rise as the year comes to an end. Increases in both Aussie shares and gold prices have combined to see that the currency finishes the year strong. Optimism in the US-China trade deal has helped to boost the AUD as both parties agree a deal is to be signed shortly. Australia is set to benefit from the deal as one of China’s biggest trading partners.

Chinese Manufacturing Could Help AUD

The market is awaiting December’s Chinese manufacturing PMI which is set to be released later this week. Should the PMI show an uptick the China-sensitive AUD is likely to benefit. Last month’s Chinese industrial profits showed a smaller decline than was predicted with a -2.1% decline on the year, but the impact of this data was not enough to sway the Australian Dollar at all. Investors will be hoping for a greater resilience within the sector from this month’s data release. AUD may find further support from the Chinese economy as market risk appetite picked up sharply in the fourth quarter, to the benefit of Aussie exchange rates.

AUD Could Be Muted in 2020 by RBA Cut Decision


As AUD heads into the new year, many investors are still expecting to see a rate cut from the RBA. In recent meetings, the Reserve Bank of Australia began to shift towards a more dovish policy outlook. Economists are suggesting that as long as an interest rate cut from the RBA is plausible due to under performance of the economy, then AUD will likely be muted going into 2020, limiting potential gains going forward. Investors will be hoping that December’s finalised Australian manufacturing PMI sees an improvement in order to tip the scales in favour of AUD to finish the year.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk

Economists Predict a Break AUD Whilst GBP Softens After Hectic Year

News for the upcoming week is suggesting that the Australian Dollar is primed for a break to a fresh 22-week high, but this momentum has been slowed mainly due to the fading liquidity. The uncertainties surrounding interest rates for the AUD in 2020 are still present and causing concern for some investors. Meanwhile, for the GBP, it has seen a softening after a rollercoaster year that has been dominated by the Brexit news and the General Election. With the GE over and an EU withdrawal plan being accepted in parliament, the GBP is beginning to settle down as its future becomes clearer to the markets.

AUD Looks to Break to 22-Week High but Uncertainties Keep Investors on Their Toes


AUD remained almost flat against the USD, settling at around 0.6920 which was almost unchanged from Monday’s closing rate. During the London trading hours, the AUD/USD rate was observed to be trading at a level of 0.6925 and 0.6911 versus the US Dollar. Despite positive trading, negative news has surrounded the AUD of late with a lower-than-expected economy growth of 0.4% in Q3 for 2019 hitting investors recently. Pair this with the annual GDP growth rate standing at 1.7% and poor labour market statistics, the economy has been painted in a dire light and has led the central bank (RBA) to slash interest rates to a record low of 0.75% where it currently stands to end the year.

Going into the new year, the uncertainties surrounding the RBA’s decision on interest rate cuts are the main talking point. Economists are suggesting that a further cut could occur by mid-2020. The RBA left the door open for another cut in their December meeting minutes and this has investors worried. Previously the RBA had downplayed the suggestions of another cut and suggested that the outlook looked positive for AUD. Since then they retracted this statement and stated that they will meet in February to reassess the economy in order to finalise their rate decisions.

GBP Settles Down After Brexit and GE Madness


For GBP, its traders will have taken a well-earned rest over Christmas and Boxing Day as the UK markets closed. The year has been full of twists and turns for the GBP. Brexit uncertainties scared off potential investors whilst a Conservative majority optimism was often the driver of positivity throughout the General Election that wrapped up a few weeks ago. Economists have suggested that the GBP is now softening against EUR and USD as the outlook for the UK economy clears up after months of confusion.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

GBP/AUD Exchange Rate Creeps Closer Despite Weak UK Growth

Coming into the middle of the week, the GBP/AUD exchange rate has edged higher even with poor UK growth data that was released yesterday. The pairing was trading at around AU$1.9340 ahead of Thursday’s election. The markets are remaining optimistic that the Conservative party will retain power in government and that Brexit will be seen through to start the year.

Pound Sterling Rises in Strength Ahead of Election


Tuesday saw the rise of GBP, in doing so it clung to previous gains. This was a little surprise as the UK’s growth data was revealed which showed the UK economy growing at the slowest rate in seven years to begin the start of the fourth and final quarter of the year. In the three months that led up to October, the economic growth within the UK stalled, and the annual GDP rose by a mere 0.7%. This weak growth was the weakest rate of expansion since March 2012. Economists have described the data batch as a negative view of the recent inactivity levels coming off the back of a flat GDP reading for the month of October.

Outlook for the AUD Looks Bleak, This Is Likely to Weigh on the Already Struggling Currency


For the AUD, it slumped against the Pound Sterling on Tuesday after a National Australia Bank (NAB) survey revealed a disappointing outlook for the Australian economy. The NAB reported that business conditions remained unchanged, whilst confidence slipped. Economists for the NAB also stated that the conditions were below average, and confidence is also lacking. Added to this, there is the risk that employment growth may slow, and investment will remain weak even with a spill over demand from public sector spending and stability in the mining sector. The positivity that was observed in the previous months appears to have now faded and therefore the NAB is not expecting a significant recovery being achieved any time soon.

For the GBP/AUD exchange rate, AUD could extend its losses against GBP. The Westpac consumer confidence data could show a further slide which would mean a decline for the ‘Aussie’. For GBP, its growth relies on confidence that the Tory party will prevail in Thursday’s election. If polls continue to reveal Boris Johnson as favourite, then GBP will likely rise higher. YouGov’s update is expected before the election and should this show a Conservative majority the GBP will likely extend its lead on AUD and other major currencies.

If you would like to learn more about current GBP/AUD exchange rate and future events that may influence them, you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

The Pound Sterling Edges on the Australian Dollar as the Exchange Rate Hits 3-Year Highs

The GBP reported gains on the Aussie Dollar yesterday. The GBP/AUD exchange rate hit a new three-year high, this is the highest since the EU referendum. With a soft AUD, the rallying looks to continue into 2020 for the GBP.

Upward Trend for the GBP Against the AUD


The GBP/AUD exchange rate hit a new three-year high just yesterday which was reported to be trading at 1.9214. The Sterling was rallying which the AUD fell soft. Experts have suggested that the Australian Dollar has been predicted to struggle throughout 2020 also. The GBP has been following a rising trend since late-July as expectations for Brexit have been building. The market hopes that Boris Johnson and the Conservative party can win a majority government in the General Election on the 12th of December which is less than a week away. Should the Tories retain power, the market expects them to be able to swiftly deliver Brexit in early 2020.

AUD Paves the Way for Other Currencies to Rally upon Its ‘Softness’


For the AUD, its recent poor performances have left it in a sorry state which many other currencies are taking advantage of and using it to rally in the exchange rate crosses. Australia reported a weaker than expected Q3 growth for 2019 which has led to the softening of the currency. Economists have suggested that the “sluggish” Q3 GDP data will undoubtedly lead to interest rate cuts in 2020. They also highlighted other issues for the Aussie economy such as consumption, household demand and ongoing slumps in the housing market.

Weak AUD Suggests Interest Rate Cuts Are Likely to Follow in 2020

Evidence for the Reserve Bank of Australia to cut interest rates is building up. The aforementioned poor Q3 GDP data has weighed heavy on the AUD and has also exacerbated the housing troubles through putting pressure on construction and investments. The RBA did opt to keep the interest rate at 0.75% this week and Governor Lowe announced a more optimistic tone for the AUD’s outlook which gave the AUD a boost in the markets, pushing rate cut expectations back.

But this optimism might not be enough for the AUD, a combination of a poor run in data, a slowing Chinese economy and commodity prices are extra burdens which may drag on the heels of the Australian Dollar. Therefore, many are predicting that rate cuts will be inevitable going into the new year to try and give the Aussie economy a lift.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

Australian Dollar Could Be Forced into QE Next Year, Whilst GDP Data Causes Sharp Drop for AUD

Reaching the latter end of the week, AUD is still facing may issues. Weak Q3 GDP data has weighed heavy on the currency. Whilst economists are calling for the RBA to make further interest rate cuts in order to relieve the Aussie economy. Meanwhile, GBP/AUD exchange rates look for new highs ahead of next weeks general election.

Disappointing Q3 GDP Data Weighs on AUD


AUD crashed following the release of the third-quarter GDP on Monday, the figures disappointed an already beaten market. This lead investors to bet on further interest rate cuts again from the Reserve Bank of Australia (RBA). The dovish news for Australia has been music to the GBP’s ears as it hones in on a new post-referendum high on the GBP/AUD exchange rate.

GBP/AUD Looks for New Post-Referendum High


For GBP, now seems to be the time to take advantage of the struggling Aussie economy, with AUD standing lower against all of its major rivals just yesterday morning. The highest recorded losses were against the election-transfixed GBP. The Pound rose higher than all of its rivals yesterday as it comes into close touching distance of a new post-referendum high. The key factor for GBP will of course be the decision of the General Election on the 12th December. For the currency markets, a Conservative majority is what they will be hoping for. A Tory majority would negate a threat of a ‘no deal’ Brexit as well as allowing the economy to progress from negotiation stage which has left the Bank of England fixed. Some are worrying that the opposition Labour party are rallying support which may see a surprise Labour rise on the day.

How the Weak Aussie GDP Data Will Affect the Outlook of AUD


With the news of the weak GDP data, AUD is set to suffer. Markets are particularly concerned with the performance of GDP data as it reflects the rising and falling economic demand which is crucial in regulating the inflation that the RBA has been coveting with its previous three interest rate cuts in 2019. Slower growth and weaker domestic demand should lead to lower inflation down the line, which is being used in support of urging the RBA to do more to meet its 2-3% inflation target. Experts are suggesting that the RBA will be forced into cutting the cash rate twice more in 2020, which would see the rate drop from 0.75% to around 0.25%.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk