Category Archives: Australian Dollar Weakness

Pound to Australian Dollar Forecast – Further interest rate cuts planned in Australia

Will Boris be the next Prime Minister?

The Tory leadership election is now down to the final two with Boris Johnson due to go head to head with Jeremy Hunt.

Johnson has been the clear leader since the votes began and the strong likelihood is that he’ll become the new Tory leader when it is officially announced on 22nd July. Johnson won the ballot with 160 votes compared to Hunt with 77. Therefore, unless Johnson makes a calamity in the next month I cannot see why he won’t win.

This has given the Pound some support against a number of different currencies but we are still in a fairly uncertain period for the Pound as we still do not what will happen with Brexit.

Australian interest rates to be cut again in 2019

In the meantime turning the focus back towards what is happening in Australia and things are not going well down under.

Following the federal election which gave the Australian Dollar a brief period of respite the currency has started to weaken again.

The Australian Dollar is close to its lowest level against the US Dollar in history and has started to weaken once again vs the Pound.

Blackrock Inc has shorted the Australian Dollar as they expect that the Reserve Bank of Australia will cut interest rates to 0.5% from the current levels of 1.25%. Australia has been one of the benefactors of having a highly competitive interest rate so with further interest rate cuts expected I think this could have a big impact on the value of the Australian Dollar.

The Australian Dollar has also felt the impact of the ongoing US-China trade wars which appear to have little signs of ending soon. As China is one of Australia’s leading trading partners any slowdown in the world’s second largest economy can often effect the value of the Australian Dollar.

RBA governor Philip Lowe has claimed that the most recent interest rate cut was an attempt to cut unemployment levels as well as helping inflation but I agree with both Blackrock and the Commonwealth Bank of Australia that there are further interest rate cuts coming during 2019.

Therefore, if you’re considering selling Australian Dollars it may be worth getting things organised in the near future.

If you would like to save money on exchange rates compared to using your own bank and would like a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Reserve Bank of Australia to drive Australian exchange rates

The Australian dollar has been struggling of late and is close to the lowest levels in a decade against its US dollar counterpart. The Reserve Bank of Australia only recently cut interest rates and further cuts are on the horizon. The central bank also hinted that other stimulus measures could be used in a bid to stimulate economic growth. Furthermore, the deputy Governor Guy Debelle earlier in the year stated that quantitative easing would be a good way to stimulate the economy. History tell us that if a central bank starts a QE program it causes the currency to devalue. For clients selling Australian dollars to buy another currency, its crucial that you keep an eye and understand the RBA next move. If you would like further information on the RBA feel free to contact me on the email below.

How will the Australian dollar perform against the pound?

Even though the Australasian dollar is set for a tough 12 months, the pound has problems of its own. Brexiteer Boris Johnson is the favourite to be the next Prime Minister and its clear that he will take a different approach compared to outgoing Theresa May. A crash out no deal Brexit is looking more likely by the day and consequently the pound is losing further value. As we approach the October deadline, if a deal isn’t in place I expect GBPAUD to fall.

For people that buy and sell Australian dollars on a regular basis or are looking to make a one off transfer, the currency company I work for can save you money. Feel free to send me the reason for why you are converting currency, the currency pair you are trading (AUDGBP, AUDUSD), and the timescales you are working to and I will send you my forecast and the process of using our brokerage drl@currencies.co.uk.

Australian Growth data causes Investor Concern (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian Dollar has suffered of late due to several contributing factors. The most significant catalyst for the fall in Australian Dollar value is the US/China trade war. Australia is heavily reliant on China purchasing it’s goods and due to this any slow down in growth in China will have an impact on the Australian Dollar.

The Trump administration has placed significant tariffs on Chinese goods and China has retaliated with it’s own tariffs. The trade war is set to escalate and could be ongoing which does not bode well for the Aussie. Iron ore is Australia’s primary export to China and at present demand remains healthy which is good news for the Aussie, that is not to say this situation will last however.

Due to global economic uncertainty investors are choosing to shy away from riskier commodity based currencies such as AUD in favour of safe haven currencies such as the Swiss Franc and the US Dollar.

There are economic problems down under such as consumer spending and the cost of living in high wage growth areas such as Sydney and Melbourne. The Reserve Bank of Australia (RBA) took the decision to cut interest rates this month to 1.25% and there is the potential for further cuts.

The Australian economy is growing at its slowest rate in almost a decade, which has fuelled speculation surrounding how long Australia will sustain its run of over 27 years without a recession.

Despite the situation down under I believe the  problems in the UK outweigh that of those down under. We currently have no PM and are in complete Brexit limbo. If Boris gets in the probability of a no deal could increase as he will be using this scenario as a bargaining chip to get a better deal from Brussels. A no deal is the investors worst fear and has the potential to cause further woes for Sterling.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Will the Pound improve against the Australian Dollar?

The Pound has this week fought back against the Australian Dollar. With the RBA having cut interest rates the focus now appears to be on Australian unemployment. The figures showed a problem with the jobs market down under which signals that the Australian economy is under some real pressure at the moment.

The average house price has also been falling in Australia and this is beginning to weigh heavily on the value of the Australian Dollar.

Next week the focus will turn back to the Reserve Bank of Australia when the latest minutes are released.

This will provide an insight as to what the central bank are looking to do in the near future concerning monetary policy.

I think there are more interest rate cuts planned this year so if the RBA gives hints that there may be more coming in the near future I think we could see GBPAUD exchange rates move in an upwards direction.

Therefore, if you’re planning to buy Australian Dollars in the near future it may be worth waiting until the middle of week to take advantage of any potential spikes in the market.

The other news affecting the rates is that of the UK’s leadership election. Currently Boris Johnson appears to be the front runner after winning the first round conclusively. If he manages to get into power this could potentially give the Pound a boost against the Australian Dollar as it will provide some certainty at least in the short term.

I have worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers and I am confident of being able to save you money when buying or selling Australian Dollars.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Australian dollar forecast: Will the RBA cut their interest rates again?

The Australian dollar is weaker this week, following the news that Australian employment data, whilst reasonably positive, was not inspiring enough to majorly turn the tide on the Australian currency. With the outlook on interest rates shifting following very poor GDP (Gross Domestic Product), which recently came in at a decade low, the Reserve Bank of Australia might well be looking to cut their interest rates once again ahead.

I am concerned about some of the more global issues that will influence the Australian dollar too, the prospect of the trade wars deteriorating ahead could be a major concern for the currency. It is likely that the Australian dollar will suffer as investors are fearful over the slowdown in the Chinese economy, this weekend’s G20 Summit will be key in determining what happens next.

If you are looking to buy or sell the Australian dollar, making some careful plans in advance is usually a good idea to try and help mitigate the uncertainty. As a commodity currency, the Australian dollar will often rise and fall on the waning attitudes to global risk and trade. Donald Trump is a real wildcard here and his constant to and fro on the trade wars, is harming sentiment.

Next week, is a series of important economic releases with the Governor of the RBA, looking to make a speech plus the latest RBA Meeting Minutes. In providing information on what lies ahead, we will learn of the latest news and developments we might expect. I predict that Lowe will have to keep the door open to further cuts and this could see the Aussie weaker.

Looking at the general trend and trajectory on the trade wars, I think the Australian dollar could lose more ground ahead. Expectations are mixed over what to expect this weekend, any signs of agreement between Trump and China, could provide some shorter-term relief for the Aussie. However, I do feel that any improvement in sentiment will only be short-term, and there will continue to be a longer net negative concern from the trade wars which will affect the Australian dollar.

Thank you for reading my post and should you have a Australian currency transfers that you wish for assistance with, I would be most interested to hear from you and discuss strategy to assist with the best rates and timings.

Jonathan Watson

jmw@currencies.co.uk

Pound to Australian dollar forecast: Which currency will devalue more, sterling or the Australian dollar?

Over the last couple of months both sterling and the Australian dollar have devalued in value due to their own specific problems. In the UK the ongoing Brexit saga is a major concern and the chances of crashing out of the EU have increased dramatically. Down under interest rates have been cut due to falling inflation and an underperforming property market. For clients that are converting sterling and Australian dollars, it doesn’t look like the UK or Australia’s fortune is going to change anytime soon, therefore the question clients should now ask themselves is which currency will devalue more than the other in the months to come?

Today MPs within the Conservative party will vote on who they want to see as the next Prime Minister. By the end of the day if a candidate has failed to achieve 17 votes they will be eliminated from the race to become the next PM. At the moment Boris Johnson is the front runner and the bookies favourite, which increases the chances of crashing out of the EU, even though he has made it clear this is not his aim. Yesterday there was an important vote in Parliament and the cross party attempt to give the commons power to stop a future PM from taking the UK out of the EU without a deal was defeated. This essentially means come the end of October if the UK fail to reach an agreement with the EU, the UK will crash out by default.

Down under it looks like interest rates could be cut further throughout the year. Most forecasters are suggesting this could be by 0.5% by the end of the year. When the cuts materialise, short term this could cause a problem for the Australian dollar, but long term it may stimulate growth. When trying to second guess sterling to Australian dollar exchange rates, my personal view is that Brexit will have the final say on the future direction. If the UK manage to persuade the EU to make changes, I expect GBPAUD to increase towards 2, however if the UK crash out of the EU I expect GBPAUD to fall to the lower rates we have seen over the last couple of years which is 1.60.

If you are buying or selling Australian dollars with sterling, I expect major fluctuations in the next months, therefore making a decision now seems wise. It’s a gamble either way! If you would like help achieving exchange rates, that you are unlikely to receive with your own high street bank feel free to email me directly and I will personally respond with the process drl@currencies.co.uk.

 

Australian Dollar weakens as trade wars hit the headlines

The Australian Dollar can be impacted by global attitude to risk and news that Donald Trump and China are still locked in battle over their trade wars is not helping the value of the currency.

The G20 summit in Japan this weekend will be key for where this may head next, should the rift continue and both sides continue to throw more and more tariffs at each other then this could damage Australian Dollar exchange rates.

Chinese economic data has also had an impact on the Australian Dollar overnight, as inflation posted at a 15 month high last night. Poor economic data from China can have a negative impact on the value of the Australian Dollar due to the strong trading ties and the number of exports from Australia to China. Should China start to struggle then you can tend to see a ripple effect onto the Australian economy so the markets tend to move in advance of this. Chinese Retail Sales figures are released on Friday so this will be one to watch.

In terms of Australian data, we have a few key releases this week with unemployment figures out tomorrow and investors and speculators alike will also be looking out for any hints or comments from members of the RBA as to their plans for what to do next with interest rates.

There are growing expectations that we may see an interest rate cut from the RBA in the near future, and this has the potential to result in the Australian Dollar losing a little ground.

My personal view is that I feel that the Australian Dollar may weaken a little in the coming weeks due to the various points above, so if you have Australian Dollars to buy then it may be one to watch very closely, if you have Australian Dollars to sell then it may be tempting to start considering making a move on soon. Of course with all the worldwide politics going on the market and opinions can change in an instant so it is key if you are in the position where you have an exchange to carry out that you have a proactive broker on your side, with various options on offer.

If you have a transaction to carry out and you would like our assistance then feel free to get in touch with me directly. You can email me on djw@currencies.co.uk and I will be happy to help you.

US/China Trade Wars hurt the Australian Dollar (Daniel Johnson)

Australian Dollar hit by Trade Wars

In times of global economic uncertainty, commodity-based currencies such as the Australian Dollar usually struggle as investors seek safe haven investments for their money. Due to this the Australian Dollar has come under pressure lately due to the trade war between the US and China.

Australia has a heavy reliance on China purchasing it’s exports and as such any fall in Chinese growth has a knock on effect on the Aussie.  There has been steep fall  in Chinese trade activity for last month caused by the ongoing trade impasse with the United States.

Could there be further rate cuts from the RBA?

Another factor in the value of AUD has been the Reserve Bank of Australia’s (RBA) decision to cut interest rates to a record low of 1.25% earlier this year. This was an attempt to boost inflation towards the RBA’s target level of 2-3%. Based on comments from RBA members earlier this year there are predictions in the press that we could  see  more rate cuts later this year. This has the probability to weaken the Australian Dollar.

Those with an Australian Dollar requirement should keep an eye out for Australian employment data due out in the early hours of Thursday. Unemployment has risen in Australia of late, which was a contributing factor in the RBA’s recent rate cut, and if this is reflected yet again in May’s figures then the Aussie could lose value.

Comments from any RBA members following this data release could give an insight to monetary policy moving forward could therefore have an impact on the Australian Dollar.

Australia’s problems do not have the same weight as those of the UK’s, with no Prime Minister and Brexit in limbo, the Pound could be set for further losses, with the majority of candidates up for Tory leader ready to bring a ‘no deal’ back to the table. I expect Sterling to remain fragile for the foreseeable future.

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 minutes 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 18 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.

Australian dollar forecast; Will the RBA cut rates again?

The Reserve Bank of Australia cut their base interest rate recently which has seen the Australian dollar weaker in recent weeks. Interestingly, the currency itself did not weaken massively on the news of the cut to historical lows last week, partly because the market was expecting it. It appears to me that the future, we might well in find the RBA forced to cut rates again.

My overall belief is that the factors which contributed to a weaker Aussie dollar in 2019 will by and large remain. A key factor in all of this is of course the trade wars with Donald Trump putting pressure on the global economy, in particular the Chinese economy which is a major customer for Australian exports.

The resulting slowdown globally is only going to continue in my opinion, this will surely keep pressure on the RBA and perhaps force their hand again down the line. It is probably worth pointing out that the Australian economy has been through one of the longest periods of economic growth in history in the Western world. Economic history suggests that at some point that growth will struggle with tougher economic times and the current trajectory and stagnation seems tricky to just shake off with just one interest rate cut.

There is important economic news for Australia this week with the release of the latest news from the Australian Bureau of Statistics, releasing more detailed information on Australian Unemployment data. This has been a key component of decisions on interest rates, as the RBA grapples with falling Unemployment and also falling Inflation.

The future looks far from straightforward for the Australian dollar, clients with a position to buy or sell Australian dollars might benefit from a quick review with our team, to get the latest news and information on their options and the best strategy to maximise any transfers.

May’s future in doubt (Daniel Johnson)

Pound to Australian Dollar Forecast

Sterling has suffered of late due to the current situation on Brexit, Brexit being one of the key drivers on GBP/AUD. We recently saw a spike up to 1.88 following what was deemed to be positive news on Brexit. May’s talks with Corbyn over a deal that could be mutually acceptable from both Labour and the Conservatives caused the Spike. I believed the gains for Sterling would be short lived as I had little faith the talks between May and Corbyn would result in a deal that would pass through the House of Commons. This proved to be true.

I believe Sterling could be in for further losses as if Farage’s becomes the UK’s representative in the bloc, it would show a huge power shift away for m the usual top contenders, creating further political uncertainty. Many believe if he does prove to be  successful this could be the final nail in the coffin for May and she will be forced to step down, she has proved extremely resilient up to this point however.

May made a speech yesterday and she stated the House of Commons vote on her deal may now be delayed from the first week of June. This was not taken well and has seen her unpopularity grow. The thoughts in many of the voters minds is no doubt that if her deal fails to be passed she will resign.

I think the vote is destined to fail when it takes place, this may be already factored into GBP/AUD to some extent as the market moves on rumour as well as fact, but I think this could also cause the Pound to lose value. The usual market reaction if a leader of a Country steps down or is ousted is that the currency in question would weaken, however in this situation we could see the opposite as anew Tory party leader may be deemed to have a better a chance of sorting out this Brexit mess.

The Aussie has had it’s own trouble, Australia has a heavy reliance on China purchasing it’s goods and services and any decline in Chinese growth will impact the Australian economy and in turn the Australian Dollar. The escalation in the US/China trade war is causing investors to move away from riskier commodity based currencies such as AUD for safe haven investments.

There is also the probability of an interest rate cut from the Reserve Bank of Australia next month, so despite the potential for further Sterling gains it may be wise to move before the decision if you are selling the Aussie.

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 18yrs, 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.