Category Archives: GBP to AUD

Australian Dollar Weakens on Trade War Escalations (James Lovick)

The Australian dollar has come under a recent wave of pressure losing ground across most of the major currencies this week. The Aussie has lost more than 4% over the last month with a noticeable fall against the US dollar. The Reserve Bank of Australia (RBA) are keeping all option open with regards to interest rate policy and the wording of whether or not interest rates will rise or fall in due course. However the RBA Governor Philip Lowe has indicated that he expects rates to rise and this was made clear when he last spoke.

The reason for the Australian dollars weakness is most likely due to the trade war escalations between the US and China. Whilst I have previously commentated that trade links between Australia and China are very strong and that Australia could be shielded by protectionist behaviour the recent escalation in tariffs is now having a detrimental effect on some of the other commodity currencies such as the Aussie. There is currently a better opportunity to buy Australian dollars.

The concern is that if global growth slows due to a trade war then the riskier currencies likes the Aussie are likely to feel the full force of slower growth and should see their respective currencies weaken. For the moment it’s all eyes on these developments and Trump had really signalled that he would seek to impose another $100 billion of tariffs on Chinese exports if there was like for like retaliation. Expect more developments form this story and potentially additional losses for the Aussie.

GBP AUD

Brexit continues to be the main driver for GBP AUD exchange rates and should see a volatile period ahead with the EU summit next week. British proposals on the future relationship should be made public very shortly and are likely to appear after the EU summit. The response form the EU as to progress so far will be very important for the pound and any escalation in tensions or the
potential for a no deal scenario is likely to result in sterling weakness. There is still an excellent opportunity for clients looking to sell Australian dollars. In my view once a deal thrashed out then the pound should strengthen materially. Although there is a risk of a no deal scenario which would be sterling negative, in my view this does not seem the most likely outcome and I am bullish for the pound in the medium term.

To discuss how these events will directly impact on your own currency requirement and how to achieve the best rates of exchange then please get in touch with me James at jll@currencies.co.uk

Hawkish Bank of England comments push the Pound higher, will GBP/AUD breach 1.80 again soon?

Despite the Pound to US Dollar rate trading at a 7-month low against the US Dollar, the currency has actually been boosted against most major currency pairs today.

The reason for the boost to the Pound to Aussie Dollars value can be put down to the Bank of England’s comments and the voting pattern of the Bank of England members. The Aussie Dollar lost a lot of value against the Pound today which is why the focus of this blog is on that particular pair.

There are now 3 members of the Bank of England that wish to increase interest rates in the UK, and this is one of the reasons for today’s boost to Sterling exchange rates. The highest the GBP/AUD pair have hit today is 1.7979 although the pair have since slipped off which to me demonstrates that there may be resistance at the 1.80 mark as we’ve previously seen.

There isn’t expected to be any rate hikes from the Reserve Bank of Australia until next year, so I do think that the Pound will climb against AUD should the hints at a rate hike later in the year from the BoE materialise.

With a quiet end to the week in terms of data I’m expecting to see AUD exchange rates driven by sentiment.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Could the Pound make further gains this week against the Australian Dollar?

According to many sources the Australian Dollar could be under real pressure in the long term as the Chinese economy continues to slow and the US Federal Reserve continues on their path of raising interest rates.

The Fed has already raised rates 7 times since December 2015 and have already increased rates twice during the course of this year as well.

The Australian Dollar has hit its lowest point vs the US Dollar in twelve months and this has also been caused by the ongoing Trade Wars between the US and China.

The Australian bond yields have now dropped below that offered by US Treasuries and this could get even worse as as the Fed continue their path of raising interest rates later this year.

At the moment the view from the Reserve Bank of Australia is that they are likely to keep interest rates on hold for a long period of time and this is why the Australian Dollar has weakened recently heading in the direction of 1.80 recently.

With the Bank of England due to meet tomorrow afternoon I think the central bank will keep interest rates on hold once again with a 7-2 split but with the UK showing some very positive Retail Sales earlier this month I think we could see some signs that an interest rate hike could be coming sooner than the markets expects and if this is the case we could see the Pound make some further gains vs the Australian Dollar towards the end of the week.

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

RBA dovish on Monetary Policy Outlook (Daniel Johnson)

RBA Rate Hike appears to be less likely

The Pound has suffered against the majority of major currencies of late. GBP/AUD fell from 1.84 to 1.75 and there has been little reason for optimism fro Aussie buyers. The lack of clarity surrounding Brexit along with a host of poor data is holding back the pound considerably.

We did see GBP/AUD rise to as high as 1.79 during yesterday’s trading, but don’t be quick to think there will be further gains. This is more due to Australian Dollar weakness than any Sterling strength.

We have witnessed the Reserve Bank of Australia (RBA) deliver a rather negative speech. It was what was not said that casued a stir. The following line was removed from the minutes:

“Members agreed that it was more likely that the next move in the cash rate would be up, rather than down”.

I have stated previously I would be surprised to see a rate hike from the RBA and this certainly seems to reaffirm my thoughts.

The pound remains fragile due to Brexit, but the ongoing trade war between the US and China is a concern for the Australian economy due to Australia’s heavy reliance on China purchasing it’s raw materials. The US Dollar is also a far more attractive option for investors with the high levels of interest.

I am still of the opinion GBP/AUD will remain between 1.75-1.80 short term. Aim for the 1.79s if you are an Australian Dollar buyer and you have to move shortly.

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. It is important to be in touch with an experienced broker if you wish to maximise 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.

Thank you for reading.

Will the Pound hit 1.80 this week against the Australian Dollar?

After having a very good run against the Pound the Australian Dollar has started to weaken in the direction of 1.80 on GBPAUD exchange rates. The confirmation from last night’s RBA minutes showed that interest rates are likely to be kept the same for the foreseeable future as they are helping to keep the economy performing well.

This has caused global investors to sell the Australian Dollar in favour of the US Dollar as the US Federal Reserve has already increased rates twice this year and this is the seventh time since December 2015.

Over the years the Australian Dollar has had a very strong positive yield but in recent times owing to the pace of rates going up in the US this has caused problems for the Australian Dollar.

However, not only is keeping interest rates on hold causing a problem for the Australian Dollar they are also facing the effects of Donald Trump’s latest threats of tariffs on Chinese goods.

As China is such a large trading partner with Australia then any negative news will often result in Australian Dollar weakness and this appears to be happening at the moment.

Trump has asked US officials to create a list of US$200bn worth of imports from China which could result in a very large trade war between the world’s two strongest economic powerhouses.

The Australian stock market has felt the effects of the news and the Pound vs the Australian Dollar hit the higher level of the 1.79 region earlier on during today’s trading session.

I personally think we could see the Australian Dollar weaken further this week and I would not be surprised to see the Pound hit 1.80 over the next few days.

On Thursday the Bank of England will hold their latest monetary policy meeting and recently the split has been 7-2 in favour of keeping rates on hold but with UK Retail Sales coming out much higher recently could this change one of the MPC member’s mind?

If you have a currency requirement coming up and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

AUD Forecast – RBA Minutes Indicate Interest Rate Hike Unlikely (Matthew Vassallo)

The AUD has come under some pressure against Sterling of recent days, although on-going Brexit concerns are still handicapping any major advances for the Pound.

GBP/AUD rates moved close to 1.80 overnight and despite the AUD finding plenty of support around this level, it seems as though the Reserve Bank of Australia (RBA) minutes released overnight have had an impact on market sentiment.

The AUD had been performing solidly of late, with the Pound struggling to make any impact as negotiations over Brexit continue to move at a snail’s pace.

With the UK government split on its preferred strategy, the Pound has found little market support over recent weeks.

However last night’s RBA minutes, which give investors a key insight into the central banks current economic stance, seems to have dampened some of the recent positivity.

They suggested that the current record low interest rates in Australia were helping to support the economy, an indication that they were unlikely to hike the base rate in the short-term.

The most poignant piece of information however, referenced a concern that any further increase in value for the AUD would lead to a slower rise in inflation and economic growth. This meant that the central bank may well look to “jawbone” the AUD, which is when they will look to talk down the currency’s value, without introducing any official devaluation methods.

This in turn has caused investors to sell-off their AUD currency positions, which is probably why we have seen the AUD weaken this morning.

In the short-term concerns over Brexit will continue to shackle any spikes in value for Sterling, with the AUD likely to find an element of protection around the 1.80 threshold.

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.

Trade Wars weigh on the Australian dollar!

The Australian dollar exchange rate is looking more and more attractive for buyers as uncertainty over the global trade outlook weighs on the currency. Expectations for the RBA (Reserve Bank of Australia) remain centered around their belief for future interest rate hikes which might well see the Aussie weaken even further in the future.

Trade Wars have weighed on the Australian dollar over the weekend which has seen the currency weaker as investors try to make sense of what the global economic outlook holds in store for the Chinese economy. With the Chinese economy at risk of warring with the US over trade tariffs, the potential for a decline in Chinese economic activity is high. With China being the main trading partner of Australia, the highs and lows of Chinese economic activity do have a direct influence on the price of the Australian dollar.

Overall, the longer term behaviour of the Australian dollar could be directly linked to the outcome from these Trade Wars, many had believed it could all be solvable and it might well pan out this way. However, it is no secret of Trump’s plans to change the terms of trade with China, unless China are making some progress with this, it is unlikely the Aussie will be rising anytime soon.

Trade Wars are not the sole focus and depending on the currency pair you are considering, there are many other elements which could drive the market. For GBPAUD the Bank of England meeting on Thursday could be a driver we need to aware of, clients with any GBPAUD transfers buying or selling Australian dollars, would do well to get in touch before the event to bring themselves fully up to date with the rates and the market.

Thank you for reading and I hope you find our information useful. For more information at no obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk

Australian dollar weakness presents opportunity!

The Australian dollar has weakened against most other currencies presenting an improved opportunity to buy the currency. The main reason for this has been the shifts on the sentiment relating to the US and China, the Trade Wars. Another factor is the US raising interest rates which has seen the Aussie losing ground against its counterparts as investors seek higher returning and more reliable shores elsewhere.

The GBPAUD rate has risen to some of the better levels of the week as has USDAUD, the outlook on both pairs could easily support better opportunities to buy the Aussie. Investors will wish to seek out the very best levels they can for buying currency and we can help monitor the market for spikes and improvements as they happen.

Typically, the Australian dollar will lose value when there is uncertainty over what is happening globally and with Australia heavily reliant on trade with China to drive its economy, any signs that there is weakness or problems with China will see the Aussie weaker. Trump’s introduction of $50bn worth of tariffs this week will only serve to amplify this trend and this explains why GBPAUD reached near 1.78 this week.

The longer term forecast for the Australian dollar is strength as the RBA (Reserve Bank of Australia) seeks a higher interest rate itself. However with the Bank of England and certainly, the United States already raising and well ahead of the RBA, the outlook for the Aussie could be more weakness in the shorter term.

If you have a transaction buying or selling Australian dollars, getting as much information as possible on the rates is key to maximising your position. We are here to help with the planning and execution of any transactions at the very best rates of exchange so to learn more, please contact myself Jonathan Watson to learn more.

Thank you for reading and please email jmw@currencies.co.uk to learn more.

 

Australian Dollar Outlook Improves (James Lovick)

The Australian dollar could be set for a stronger period ahead following a series of better economic data helping support the Aussie. Unemployment data released this week arrived better than expected at 5.4% against consensus of 5.5% proving beneficial for the dollar. There is hope that the improvement in the labour market should start to feed through into higher wage growth which is something the Reserve Bank of Australian have been waiting for. The Aussie was also boosted on the back of higher consumer inflation expectations which are pointing to higher prices down under going forward. The data suggests that Australians expect prices for goods and services to climb higher and this is yet another key criteria the RBA are monitoring before any decision is made on potentially raising interest rates. Looking forward the dollar could see a better period ahead and clients looking to sell Australian dollars may see a good window to convert within the next couple of months.

Next week sees the RBA minutes for the meeting earlier this month and may offer clues as to the central banks thinking. Any suggesting the conversation is moving towards raising rates would be seen as good for the Aussie.

The US are widely tipped to impose more trade tariffs on China imminently and this could happen as soon as today. Australia for the moment appear to be relatively protected for this action due to the strong trade ties it has with China.

GBP AUD

There are two major drivers for the GBP AUD pair at present. Clients looking to buy or sell Australian dollars should be aware of the Bank of England meeting next week as any change of tact from Governor Mark Carney could see the pound react. Any suggestion a rate hike could happen in August is likely to see rates for GBP AUD rally. Perhaps more importantly the Brexit withdrawal bill goes back to the House of Lords on Monday after there has been some disagreement in government as to the final wording of the text. This could prove tricky for the Prime Minister and any political tensions here could see the pound come under pressure. My long term view of GBP AUD is for considerable strength so sellers may wish to strike whilst the opportunity is still there.

For more information and guidance on Australian dollar exchange rates and for assistance in making transfers at the right time then please feel free to contact me at jll@currencies.co.uk

Brexit uncertainty continues to hurt the Pound (Daniel Johnson)

GBP/AUD – Sterling remains fragile due to the lack of clarity surrounding Brexit and poor economic data. If there is progress in Brexit negotiations expect the pound to rally. Unfortunately very little progress is being made. The current point of contention is the Irish border deal. At present Theresa May and David Davis are unable to even agree on a back up deal if a deal on the Irish border cannot be reached. Ideally they would like to have something in place before the EU summit on 28th June. The current situation does not bode well for Sterling.

Recent data releases continue to be poor, manufacturing data this week saw the biggest fall since October 2012 and GDP came in below expectations at 0.2%. Average wage growth also saw a decline, unemployment remained unchanged, but it is important to remember that zero hour contracts are not a stable form of employment.

I am of the opinion there is little justification for a rate hike from the Bank of England (BOE) in the coming months and would be surprised to see one this year.

Thing are not all rosy down under however. Australia is heavily reliant on China purchasing it’s raw materials, particularly iron ore. The ongoing trade war with China and US is a concern. If China’s growth drops, so will the demand for Australian goods and services which will hit the Australian economy and in turn the Australian Dollar.

There are economists with the view there is the possibility of a rate hike from the RBA this year. I am not so confident.

If you are buying Aussies GBP/AUD is currently range bound between 1.75-1.80. Aim for 1.77 + if you have to move short term.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson