Category Archives: Australian Dollar Weakness

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

AUD Receives a Boost from RBA and Trade Stats but Interest Rate Cuts Still Look Likely for 2020

Positive news broke yesterday from both the RBA and the Australian trade statistics. AUD had been in a dark place of late and this news was welcomed with open arms. However, economists are still tipping major banks in Australia to cut interest rates in 2020.

RBA Statement Pushes AUD to Front-Running Position


AUD led the charge early yesterday on the global foreign exchange markets. This came about following a statement from the Reserve Bank of Australia (RBA) which stated that improvements in the global economy meant that no immediate interest rate cuts were needed – something that investors feared. The currency also bolstered following reports on Tuesday that the country had recorded another current account surplus, prompting analysts to suggest that the mid-term outlook for AUD is set to continue its improvement.

The Interest Rate Cut Stays the Same, Giving a Boost to AUD


In a statement from the RBA, they announced that interest rates will remain unchanged at 0.75%. The RBA also stated that whilst the global risks are still tilted to the downside, some of the potential risks have lessened recently. Economists noted that these statements caused a jump in AUD. With this the Aussie Dollar’s strength meant that the GBP/AUD exchange rate fell from 1.8970 to 1.8914 yesterday.

Whilst News Is Positive for AUD, Potential Lingering Cuts May Await in 2020


The RBA statements have given the foreign exchange markets clear indication that there will be no further interest rate cuts for the time being as the global market picks up. However, there has been talk that the RBA will continue cutting rates all the way down to 0.25%, paired with quantitative easing methods which will be an attempt to boost the Aussie economy. The side effect of this however is a weaker currency, therefore the announcement that the RBA will be stepping away from this is positive for AUD’s strength, at least for now.

Alongside the positive RBA statements, the Aussie trade dynamics improved this week. The boost to the current account surplus came as exports outstrip imports, which has created a positive supply and demand dynamic on AUD. Analysts have suggested that a reduced reliance on foreign savings will support the fundamental valuation of AUD and makes it less susceptible to the risks of the global economic outlook.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk

Promising Chinese Data Aids Aussie Dollar

The Australian Dollar has started the month on the front foot, this is mainly due to some better than expected data coming from China yesterday. With AUD holding a strong tie to the Chinese economy, the boost was mutual for both parties. To start the week the GBP/AUD exchange rate is down from the end of last week, with resistance being shown on the charts.

Chinese PMIS Exceed Expectation, Bring up AUD with It

Yesterday, the release of China’s November PMIs were released, all three beat expectations. The Caixin manufacturing index came in at around 51.8, which beat the market prediction of 51.5. This figure also pushes up to a three-year high, this might be a hint that the Chinese economy is on the mend. For Australia, China is its prime trading partner, the pick-up in the Chinese economy is a huge boost for AUD and its outlook. The positive news took AUD above GBP, EUR and USD on Monday.

GBP/AUD Exchange Rate Drops Following Resistance on the Charts

The GBP/AUD exchange rate is currently trading at 1.9068, which is down 0.30% from where it finished up on Friday last week. This drop has coincided with the rate reaching a peak against a notable level of resistance on the charts. GBP/AUD previously struggled to overcome the level of around 1.9091. However, on Friday, the exchange rate pushed through this resistance as it rallied to highs that haven’t been matched since the 2016 EU referendum.

AUD Outlook Appears to Be Dominated by the Upcoming RBA Decisions and Third Quarter GDP Data

For AUD, the outlook seems to be revolving around the RBA and the release of GDP data over the course of the rest of the week.

For the RBA, markets are considering whether the RBA will cut interests rates again in 2020. There are also concerns that they may begin to print money to buy government bonds which would introduce a quantitative easing programme – something that the RBA suggested wasn’t on the horizon. Both QE and rate cuts would give a boost to the Aussie economy, but a trade-off would be that AUD would be weaker in 2020. The RBA is set to take place later today (Tuesday).

For Wednesday, attention will turn to the Australian Bureau of Statistics who are set to release the Q3 GDP for 2019. Any positive figures will likely give the Aussie economy a further boost off the back of the strong Chinese data that emerged.

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

A Vulnerable Pound Versus a Potential Rallying Australian Dollar for the Upcoming Week

With a fresh week ahead in the trading markets, the performances of the GBP and AUD have been highlighted and their outlooks cast. The GBP had been volatile lately and continues in this trend up until the General Election on the 12th December, but vulnerability is proposed ahead of finalised PMI’s for the UK. Meanwhile, the AUD has been in a troublesome state for a number of weeks, particularly with the breakdown of the US-China trade talks. But rumours suggest that the AUD could rally this week following the release of GDP data.

GDP Data Could Give AUD a Much Needed Lift in Exchange Rates


The AUD has faced challenges over the past few weeks, more recently US President Donald Trump recently caused upset to the US-China trade talks through his support to the protests in Hong Kong. The Chinese noted that the US should avoid getting involved in the conflict, but the President went against this wish – causing a breakdown in peace between the two countries.

However, the AUD’s luck may be on the rise now as expected GDP data is set be released this week. Predictions for this data have been positively rated and should this be the case then the AUD will likely receive a much-needed boost to it’s strength in the trading world as well as edging over competitors like the GBP.

GBP Could Fall Ahead of PMI Data


Economists are expecting the GBP to drop following the release of the PMI data for the UK. Investors are unlikely to see significant revisions being made to any of the three PMIs with the data predicted to shine a light on the widespread slowdown of the UK economy. But should the opposite be true, and the PMIs show revision, the GBP could rally from this and edge over its competitors. However, even so, the volatility and uncertainty of the upcoming election is likely to weigh heavy on the GBP/AUD rate over the coming week, regardless of positive economy data.

AUD May Receive Further Boost Following Solid Manufacturing Growth


With the GBP at an uncertain stage, the AUD could edge over the GBP with a duo of the GDP data as well as November’s manufacturing PMIs which are set to be handed out this week. Previous data suggested that the PMIs showed solid growth, and if this trend continues the Aussie Dollar will no doubt accelerate in strength.

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.

Underperformance Is the Key Word This Week for the Australian Dollar, with QE Predicted in 2020

The Aussie Dollar has been suffering lately, with no luck going into the latter end of this week either. Despite the RBA’s governor Philip Lowe suggesting that QE was not a tool to be used right now, he failed to remove it out of the question altogether and this has instilled fear of QE being utilised in early 2020.

QE Looking Likely for the RBA in the Early Stages of 2020


Economists have tipped QE for the RBA in early 2020. The current target for inflation has not been met and this has thrust the QE or negative rates into the question for the RBA. The markets are beginning to fret whilst the labour market deteriorates despite interest rate cuts from the bank. To rub salt into the wounds of the AUD, the global economy is still dragging its way through a slowdown. However, Lowe stated on Tuesday that extreme policy actions like these will be unlikely for Australia as the AUD growth should pick up next year.

What Would QE Mean for the Aussie Economy?


QE refers to the creation of new money from the RBA in order to buy government bonds and force their yields lower. These yields are integrated into all the interest rates that are charged across economies so when they are forced lower from central banks an indirect reaction of a reduction in borrowing costs for companies and households is also induced. The general idea with this is that low borrowing costs leads to more spending which ultimately can help lift inflation towards a predetermined target. However, in doing so QE means a lower return for investors and a more unattractive currency.

Us-China Trade Talk Looks to Break down Once More, AUD Looks to Suffer


For weeks the AUD has been banking on a successful trade deal between the US and China. Things appeared to be going well recently, but news broke yesterday that President Trump has signed the Hong Kong Human Rights and Democracy Act into law this week which has sparked immediate reaction from China. Investors are now worried that a breakdown could come to light as China sent threats of retaliation to the decision. The AUD is heavily reliant on the Chinese economy and therefore, should the deal not go through, it will likely face losses.

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.

GBP/AUD Exchange Rate Could Rise to 2.0 Provided a Tory Majority for the Election

GBP’s strength in the upcoming weeks is solely focused on the outcome of the general election on the 12th of December. Analysts have noted that a Conservative party majority would swing in favour of getting Brexit done with a deal and would give GBP a vote of confidence with investors. They also mentioned that there is potential for GBP/AUD to rise to 2.0 should the Tories win the election outright, paired with QE fears surrounding the RBA.

GBP Could Be in for a Positive Boost Should the Conservatives Win the General Election Outright


One of Australia’s top high-street lenders, NAB, noted that the outlook for the Pound Sterling is binary, solely dependant on the outcome of the election. A Tory majority and win would see GBP rise as Brexit would have a better chance of being seen through and done so with an agreed deal. On the flipside, if Labour manage to make up lost ground and win the election, GBP has been forecasted to plummet. Opinion polls have betted a Tory majority as the single most likely outcome of the election, this has left investors with optimism for the December date.

A GBP Boost Would See AUD Slump in the Exchange Rate


Whilst a boost for GBP is great for the UK, this would mean that AUD would likely slump against the Pound in the cross. The Aussie Dollar has been underperforming of late and has done so partly due to the RBA sending off a dovish tone that has investors worrying about future interest rate cuts and QE methods. RBA governor Philip Lowe mentioned that the bank’s unconventional monetary policy is a tool which the RBA has in its arsenal which may at some point be deployed into boosting the Australian economy.

GBP/AUD Rate Could Reach the 2.0 Point, the Outlook for Both Currencies Is Dependent on Various Factors


For GBP, the election outcome will bear the most weight on the currencies performance in the new few weeks and ahead. A Tory majority would likely see GBP rise whilst a Labour majority would likely see GBP slip and let worry start to sink in. For the RBA, it would likely look to reverse some of the dovish comments expressed by RBA governors in recent speeches. In order to do so, AUD will be hoping for positive news surrounding the US-China deal as positive developments in the Chinese economy will likely boost Aussie exports.

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

AUD Positive Following RBA Dismissal of QE, but Remains Volatile and GBP Slumps

AUD has had no easy road in recent weeks. However, yesterday the Aussie Dollar rose following a dismissal of quantitative easing (QE) from the RBA. Meanwhile GBP retreated in response to recent general election polls.

QE Played down by Governor of the RBA


RBA governor Philip Lowe presented his speech yesterday to the Annual Australian Business Economists Dinner held in Sydney. He emphasised that QE was not on the RBA’s agenda at this point in time. He also elaborated that negative interest rates in Australia are “extraordinarily unlikely”.

These words of optimism gave a slight lift to AUD as investors had worried that QE was a technique due to be used following a previous dovish response from the RBA. Other factors like the inflation targets not being met, the labour market deterioration even with three bank interest rate cuts and the ‘Phase One’ deal between the US and China which still remains unsolved all weigh heavy on AUD and many believe that QE and interest rate cuts may be on the table at some point in 2020.

GBP Retreats in the GBP/AUD Exchange Rate Pairing Following Poor Poll Results for the Tory Party


GBP lost some ground yesterday as new general election polls were released. The results showed that the Tory party had begun to slip and lose its steady majority over the opposition Labour party. The scores from Kantar showed the Tories at 43% whilst the Labour party creeped up to 32% of votes. Economists have suggested that a surprise Labour win would send UK equities tumbling, even with a softer Brexit. Should the Labour party catch up or even surpass the Tories it will likely weigh on GBP as Brexit will not be so much a done deal as Boris Johnson has promised the markets.

AUD Hangs onto Hawkish Response from Dr Lowe Whilst Observing the Us-China Trade


AUD was put in a better position following Lowe’s speech, but the RBA failed to fully rule out the chance of QE or interest rate cuts, instead suggesting that these options were still on the table should Australia experience any rapid increases in unemployment with a decline in inflation. With the comments the gains seen by AUD began to slowly ease back. Investors will be looking to the US-China trade deal for any breaking headlines to suggest the deal is closer to being closed.

Thank you for reading and I look forward to hearing from you soon, Jonathan Watson – jmw@currencies.co.uk

An Edging GBP/AUD Exchange Rate Following Rising Tory Majority Hopes

A new week spells a new opportunity for both the Australian Dollar and the Pound Sterling to attain a boost to their current standings. But with AUD’s recent poor performance and reliance on the US-China trade war deal being completed, a boost is looking unlikely. For GBP, the heavy reliance on its general election outcome next month. A Tory majority appears to be a reassurance that Brexit will be delivered, that is what investors are banking on.

GBP/AUD Rate Edged Higher Yesterday


The GBP/AUD exchange rate edged higher yesterday by 0.4%. The pairing was trending at around AU$1.897, the Conservatives continued to maintain their lead in the polls following the much anticipated release of their manifesto on Sunday.

The deputy director-general of the Confederation of British Industry (CBI) mentioned that a pro-enterprise vision will gain businesses attention, whilst looking to build upon more ambition on areas like access to skills, infrastructure and reaching net zero. The Conservative party are currently in favour with the markets due to their pro-business approach with their policies. GBP/AUD edged yesterday as the response to the new manifesto did not upset the Tory lead over the Labour Party in the opinion polls.

AUD/GBP Rate Sinks, Us-China Trade Deal Becomes Urgent for Australian Economy but Shows Signs of Promise


For AUD, trading has not been positive over the past few weeks. Being in a constant stranglehold for the outcome of the US-China trade war deal, their progress has been limited in the markets. However, the deal once again looks more hopeful, President Trump mentioned that a deal between the two largest economies of the world was ‘potentially very close’. This gave much needed optimism to the trade talks. The RBA’s Assistant Governor gave a speech yesterday and the minutes are eagerly awaited to observe whether a dovish approach has been taken to the economy of Australia. Should this be the case, it is likely that the Aussie Dollar will take a hit.

AUD Could Rise Following Hawkish RBA Commentary


Philip Lowe, governor of the RBA is set to give a speech later today, investors will be hoping that he produces a hawkish tone which will likely buoy AUD on hopes of a recovering economy. Alongside this, any progress being made in the US-China talks will undoubtedly boost AUD/GBP standing. GBP will be looking towards the October BBA mortgage approvals which are set to be released later today, should positive figures be announce GBP will likely favour over AUD in the day’s trading efforts.

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.