Category Archives: Australian Dollar Weakness

Important events on the Australian dollar this week

The Australian dollar exchange rate has been volatile in the last few weeks owing to the uncertainty over the future direction we will see on a number of factors. These include the Trade Wars with China and also the outcome from the latest economic data in Australia. Investors are expecting us to see the Australian currency closely reacting to developments on these issues, the immediate outlook is not clear.

China’s economic performance is a key indicator of the Australian dollar as investors track its progress with a view to better understanding where events will turn next. One of the key factors in all of this will be the next steps that the Trade Wars take with investors feeling any negative news would see the Australian dollar weaker.

Overnight are two speeches by RBA, Reserve Bank of Australia, members which will carry some weight in the market. The actions and comments by the central bank are very important in providing some direction on which way the currency will perform in the week ahead. Most notably ahead is the speeches by Assistant Governor Bullock and also Debelle, either of which could prove most interesting for the Aussie.

Last week, there was some more positive Unemployment data released which will have had a more swaying impact on future economic policy from the RBA. Other news I would foresee as being instrumental in shaping the likelihood of market fluctuations will be the ECB interest rate decision. The European Central Bank will provide some insight into their own future monetary policy as well which will influence global risk sentiment.

In targeting a higher interest rate over the longer term, the Australian dollar exchange rate could lose value if investors look to try and shift towards the potentially higher yielding Euro.

If you have a currency transfer involving the Australian dollar and wish to learn of some of the latest market news, please do not hesitate to contact me Jonathan Watson directly.

Jonathan Watson

jmw@currencies.co.uk

AUD Forecast – What are the Factors Driving GBP/AUD Exchange Rates? (Matthew Vassallo)

GBP/AUD rates have dipped slightly during Thursday’s trading, with the AUD continuing to find support around the current levels.

The pair fell to a low of 1.8338, having been trading above 1.84 at its high over night.

The Pound has failed to make any sustained inroads against the AUD since the weekend, after premature talk of a Brexit agreement caused a sharp sell-off of GBP positions on Sunday.

This put the Pound on the back foot when trading lines opened on Monday. It has been a tough week for Sterling, which has seen its value decrease by around three cents, or the equivalent of 3000 AUD on 100k GBP/AUD currency exchange.

I anticipate that the AUD will now find plenty of support again around 1.85, when it seemed as though the Pound was set for a run on 1.90 last week, when a Brexit deal looked imminent.

This is another prime example of how the markets may price in an expected political outcome, only to see the currency in questions value diminish when the expected result does now come to fruition.

Looking at the driving factors behind GBP/AUD and any updates or breakthrough in Brexit talks, will no doubt boost investor confidence and the Pound is likely to benefit as a result. Similarly any talk of a no-deal outcome again and it will likely have the opposite e effect.

Looking at the Australian economy and current slowdown in global trade is certainly having a negative impact. This, along with the current trade war between the US & China is causing investors to shy away from riskier currencies such as the AUD. We generally see commodity-based currencies such as the AUD lose value during times of global economic uncertainty.

If you have an upcoming AUD 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 winning 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.

 

Weaker AUD beneficial for the Australian economy, where next?

The recent RBA, Reserve Bank of Australia Minutes showed us that the RBA view the recent weaker Australian dollar as good news for the economy in helping to support growth. Australia’s economy is heavily reliant on the sale of its raw materials globally, including to China, its major trading partner. The expectation here is that the RBA will not be in any rush to raise interest rates, they view the weaker currency as ‘good news’.

The big news for this week on the Australian dollar is Unemployment data released in the early hours of tomorrow, at 12.30 GMT. The figures are predicted to show the Unemployment rate holding steady but a lower participation rate and possibly a lower employment rate. This could see the Australian dollar weaker as it underscores the recent direction and sentiment that has weakened the currency.

This could mean the Australian dollar continues to drift lower and remain weak, particularly owing to other factors including the likelihood of Trade War issues continuing to weigh on China, its largest trading partners. Markets are concerned that the Chinese economy is struggling as a result of the trade disputes with the US and Donald Trump, this has seen some economic indicators in China reach concerning levels.

China is struggling with a slowing rate of growth and concerns over home sales, rising Inflation and also falling car sales. Other examples of anxiety include the amount of debt taken on by Chinese authorities in their pursuit of infrastructure to build their economy. All of this is painting a slightly worrying picture for the Chinese economy as the trade wars are likely to get worse and this will all put pressure on the Aussie dollar too.

If you have a transfer involving the Australian dollar into any other currency and wish for some expert insight into the trends and themes to move the market, why not get in touch with us. We are a firm of specialist FX brokers with many year’s experience in managing large volume international payments.

Thank you for reading and we hope to hear from you soon.

Jonathan Watson

jmw@currencies.co.uk

What can we expect next for the Australian dollar?

The expectation is the for the Australian dollar to continue to face headwinds as the market tries to assess its attractiveness over the longer term. With Australia struggling whilst some other assets become more attractive, the pressure is on for the antipodean currency. Having lost value in recent weeks as market expectations deteriorate, what can we expect in the short term?

To answer some of the questions over the Australian dollar’s recent performance look no further than the United States. A key factor in this has been two fold from the US with raising interest rates and the Trade Wars both weighing on the performance of the Aussie dollar.

In raising interest rates to 2.25%, the US dollar is now a much more attractive currency to be holding from an investors point of view, versus the 1.5% on offer from Australia. With regard to the future prospects in this department, it appears likely that the US will be continuing to raise interest rates. This will only increase the trend we have seen of late and continue the pressure on the Australian currency.

On the subject of Trade Wars, these do not appear to be diminishing and therefore the Australian dollar should remain under pressure as these potentially intensify or remain in place. Expectations for the Australian dollar will continue to focus on its attractiveness to hold but with these issues continuing and wider concerns in the global economy about just what lies ahead, the Aussie might find more troubled waters ahead.

Next week is Unemployment data which will be a big driver on the exchange rate and could see a shift. There is a focus on Australian interest rates too and we could easily see this data impacting future decisions. Whilst no hikes are likely down under anytime soon, this is a more short term factor to move rates.

Thank you for reading this post and I would be delighted to speak to you if you have a currency transaction to make in the coming weeks. Please contact me Jonathan Watson on jmw@currencies.co.uk to learn more.

GBP AUD Breaks 2 Year High (James Lovick)

The pound has made good gains against the Australian dollar this with rates for the GBP AUD pair back over 1.85. Rates for GBP AUD have now broken above a two year high creating a good opportunity for those looking to buy Australian dollars. The pound is receiving some mixed signals on Brexit although the general consensus is that a deal is within sight.

The EU are expected to offer the UK a proposal which should allow for much of the Chequers proposal being championed by Prime Minister Theresa May. It has been reported that something around 30-40% of her proposals will be granted in a deal but the stumbling block of the Irish border appears to remain. A new stumbling block has appeared in the form of the political declaration that will be made with the withdrawal agreement. Theresa May is asking for a precise agreement on frictionless trade, something the EU is reluctant to agree to. Expect considerable market volatility and opportunity as new developments unfold over Brexit.

The Australian dollar has had some of its confidence dented this week as events in China give cause for concern for global growth. The Peoples Bank of China has intervened to try and stimulate growth in China by lowering finance costs which should encourage growth. The markets are taking this as a sign that China is noticeably concerned about the prospect of a slowdown in China which is seeing funds move out of the Australian dollar. There has been a clear flight to safety away from emerging markets back to the safety of the dollar which could see further falls in the Australian dollar if the trend continues.

For more information on Australian dollar exchange rates and for assistance in timing your exchange at the best exchange rates then please feel free to contact me James at jll@currencies.co.uk

Pound hits 2 year high to buy Australian Dollars (Tom Holian)

The Australian Dollar has continued to weaken against both the Pound and the US Dollar recently as investors have begun to bypass the Australian Dollar as interest rates down under appear to be staying the same for the foreseeable future.

The Reserve Bank of Australia has kept interest rates on hold at 1.5% again this month and they have not changed interest rates in two years and with the US continuing to hike interest rates the Australian Dollar has been sold off in favour of the US Dollar and this has weakened the AUD against a number of different currencies including Sterling.

The Pound vs the Australian Dollar is now trading at its best level to buy Australian Dollars since the Brexit vote back in June 2016 and the question really is how long will this rally for Sterling last?

Clearly the Pound is under a lot of pressure at the moment with the ongoing uncertainty caused by the Brexit talks but the sentiment appears to have been softening recently towards the UK and rumours are that the talks could be concluded by next month.

If this does happen we could see the Pound make even further gains as this will provide investors with more certainty as to what to expect moving forward and encourage them to invest into the UK.

The Australian Dollar has also felt the negative effects caused by the Trade Wars between the US and China.  As China is Australia’s largest trading partner any problems in the second largest economy will often have negative effects on the value of the Australian Dollar and I think this could continue to harm the economy and therefore cause further Australian Dollar weakness for the Pound.

I have worked in the foreign exchange markets for one of the UK’s leading currency brokers for over 15 years and with my experience I’m confident that not only can I save you money when exchanging Australian Dollars but also help you with the various options available to you.

Email me directly and I look forward to hearing from you Tom Holian teh@currencies.co.uk

Sterling hits 2 year high vs the Australian Dollar as Brexit talks progress (Tom Holian)

The Pound vs the Australian Dollar has now hit its best level in over two years as the Brexit talks appear to be gathering pace.

At the time of writing GBPAUD exchange rates have hit 1.85+ which is the best level since the day of the Brexit vote back in June 2016.

According to a number of different sources the Irish border issue appears to be getting closer to being resolved and we are just less than two weeks away from the EU summit due to take place on October 18th.

The main topic will clearly be what happens with the ongoing Brexit talks and with the Head of the EU Commission Jean-Claude Juncker suggesting that if a deal is not reached this month it could be concluded next month the Pound has made some huge gains against a number of major currencies including the Australian Dollar which is great news for anyone looking to send money to Australia.

Meanwhile, with the US Federal Reserve having increased interest rates to 2.25% recently the disparity between what is available in terms of interest in Australia compared to that of the US now stands at 0.75% which is the biggest difference since the Australian Dollar was launched over thirty years ago.

In recent years the Australian Dollar has been the benefactor of higher interest rates compared to that available in many other western economies but with interest rates now higher in the US and also showing US GDP at 4% then global investors appear to be bypassing the Australian Dollar at the moment.

Indeed, the ongoing Trade Wars between the US and China do not appear to be slowing down and as China is Australia’s biggest trading partner any negative news will often affect the Australian Dollar and this is another reason for the GBPAUD exchange rate moving in an upwards direction at the moment.

I think a deal is fairly close to being agreed at the moment and if and when this happens I think it will provide the UK with some certainty going forward allowing the economy to know what to expect and I think this is why we could see GBPAUD exchange rates continue to go up if the talks progress positively in the next fortnight.

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

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident that I can also help you with the timing of your transfer.

Email me directly Tom Holian teh@currencies.co.uk

GBP AUD – Brexit Final Stages (James Lovick)

The pound has pushed higher against the Australian dollar with levels breaking over 1.83 for the GBP AUD pair.

Now that the conservative party conference is out of the way and the “Dancing Queen” Prime Minister reiterated her vision of leaving the EU, the conversation for these coming weeks will be dominated by Brexit. With movement in negotiations expected by the time of the next EU summit this month it will be a hugely interesting and volatile period for sterling exchange rates.

Ultimately the direction of the price of sterling will be dictated by the terms of Brexit and whether or not there is a deal. Whilst the expectation is that some sort of a deal will be reached the markets do not yet appear convinced this is the case. With growing support for a Canada style type trade deal which is supported by the likes of Boris Johnson there could be some major changes yet to play out in this negotiation. This is likely to be one of the most volatile periods ahead for GBP AUD and there are likely to be opportunities for those clients looking to buy Australian dollars. Similarly if the negotiations approach a no deal scenario then those looking to sell Australian dollars could see some better rates on the horizon.

The trade wars between the US and China continue to weigh heavy on the Australian dollar and it may only be a matter of time before new tariffs are introduced. Any escalation on this front is likely to weigh heavy on the Australian dollar due to its large volume of exports which go to China. A global slowdown would also carry inherent risk for the Aussie. The commodity currencies generally fare less well in time of global economic uncertainty.

For assistance in making transfers and help with the timing of an exchange then please feel free to contact me James at jll@currencies.co.uk

RBA interest rate decision key for AUD movements this week

Tomorrow we have the release of the RBA (Reserve Bank of Australia) interest rate decision and possibly more importantly the RBA rate statement.

There are no expectations of any interest rate changes this time around but what will be key is the tone of the RBA in their monetary policy statement. The Australian economy has shown small signs of growth and with that we would expect a slightly more positive tone from the RBA, but I would personally be surprised to see a nod towards any imminent change to interest rates as there is still an issue with rising house prices and high household debt. Not to mention the on-going trade wars between China and the U.S that have been regularly covered on this site.

Interest rates can be key to the value of a currency and even the mere speculation of a rate hike can lead to that currency gaining strength, so should the RBA suggest that a hike is getting closer then you could expect to see the Australian Dollar gain a little value in Tuesday’s trading.

The rate decision dominates market news out for Australia this week but there are a number of other releases around the globe that may still impact Australian Dollar exchange rates. For those tracking GBP/AUD we currently have the Conservative party conference on until Wednesday in the U.K along with Brexit which could throw up anything at any time. Anyone following EUR/AUD will be keeping a keen eye on the Italian debt and budget issues that are creeping into the media and for those with an interest is USD/AUD the Non -farm payroll data due out in the states at the end of the trading week on Friday will be one to watch.

Non-Farm payroll data measures the number of people in Non-agricultural employment in the states and can have an impact on all major currencies as it will effect global attitude to risk.

If you have a pending Australian Dollar exchange to make and you would like assistance with it, both in terms of getting the most for your money and moving it over securely then feel free to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk and I will be more than happy to get in touch.

GBP/AUD exchange rates – Brexit and trade wars will be the main drivers in my opinion

So far the Pound has had a fairly quiet start to the trading week but all eyes will be on the EU summit today in Salzburg, it is during this conference that we will expect Brexit to be discussed in more detail and this is the type of situation where snippets of news and rumours may hit the wires at any time, leading to Sterling volatility. This volatility may create good buying or selling opportunities depending on the news so if you have a fairly imminent currency exchange to carry out it is well worth contacting me today so that I can keep you fully aware of the latest market movements,

There are officially 191 days to go until Brexit will more than likely be official, and there will be plenty of market movement from now until the lead up to March 2019.

There are plans for a further summit in October and then an extraordinary EU summit is pencilled in for November, and this is where at present we would expect a final deal to be thrashed out.

Towards the end of this month we also have the Conservative party conference on 30th September which may also be one to watch, with Theresa May still seemingly under a little pressure any further negative news surrounding her position may weaken Sterling exchange rates.

In terms of economic data to come out this week, we have Retail Sales figures tomorrow morning at 09:30am and analysts expectations are for a slight drop off in the Retail sector so do be cautious of this release tomorrow if your currency requirement is imminent.

Personally I still feel that Brexit news is going to be key to where the Pound heads next and unfortunately the unpredictable nature of these discussions and the fact that you just do not know which way this is going to head next makes it extremely difficult to know where Sterling exchange rates will be in the coming weeks.

On the Australian Dollar side we have Donald Trump and trade wars that are still very much impacting global attitude to risk, when Trump and China lock horns you tend to see Australian Dollar weakness and when things start to settle the Australian Dollar is fighting back.

The rest of this week is quiet for economic data that may impact the Australian Dollar so I feel that most movements will be based on attitude to risk and political issues.

If i had to stick my neck out and make a prediction I feel that there is more chance of GBP/AUD going up in the next few days than coming down.

Should you not be of a gambling nature and you want to remove the risk or your currency exchange costing a lot more than you had budgeted for then the sensible option may be to look into booking something sooner rather than later as we enter the final stages of Brexit talks. There are a number of contract options that we have available to protect you including a forward contract, stop loss or limit order. If you would like further information on any of theses contract types, or you would like to discuss a potential exchange in more detail with one of our brokers here then please feel free to call our trading floor on (+441494 725353) or email me (Daniel Wright) directly on djw@currencies.co.uk and and I will be more than happy to help you personally.