Is now the time to sell Austrlian dollars and buy sterling?

Last week the Australian dollar fell to multi year lows against sterling and the US dollar and the economic indicators suggest that further losses are on the horizon for people selling Australian dollars. For people that are researching potential events that will impact the Australian dollar, you should have come across the reasons for why the Australian dollar has been devaluing. The key driver is the strength of the US dollar.

Carry traders which borrow money in low interest rate jurisdictions and invest in high interest rate jurisdictions are not choosing the Australian dollar like they once were because US interest rates are now higher than in Australia and it looks like the gap is set to widen when the US raise interest rates in December.

The other major problem for Australia is that they are stuck in the middle of the trade war between the US and China. Australia heavily relies on China for trade, however Australia also relies heavily on the US for security. At present the trade war between the two leading countries is having a negative impact on the value of the Australian dollar and I expect this trend will continue.

As the UK are now closer to securing a deal with the EU, it looks like GBPAUD exchange rates are heading in one direction and that’s towards 2. For people that are selling Australian dollars to buy sterling you are still generating an additional £15,000 on a 500,000 transfer compared to pre Brexit levels, therefore taken advantage now may pay be your best option.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@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

Price changes for GBP/AUD likely to be driven by the Pound over the next 24-hours

Those of our clients and regular readers following the Pound to Australian Dollar exchange rate should pay close attention to UK politics today, as I believe the next spike in the GBP/AUD’s value is likely to be driven by UK politics.

Yesterday all eyes were on Boris Johnson’s speech at the Conservative Party Conference, and he didn’t disappoint as he gave another harsh critique of the ‘Chequers plan’ devised by the current UK Prime Minister, Theresa May. Today there could be movement for Sterling exchange rates against all major currency pairs as it’s the final day of the Conservative Party Conference, and Theresa May is scheduled to speak with Brexit being the main focus.

Yesterday Boris Johnson was supportive of May’s leadership but he once again urged her to move away from the Chequers plan she has devised and suggested that she focuses more on a Canadian style deal. I expect her to be questioned on his comments and the markets to follow her responses closely. With Brexit now just around the corner and expectations of a deal being in place by November, I expect to see Brexit headlines dominate financial media and for it to be the main driver of the Pound to Aussie Dollar exchange rate.

On the Australian side we’ve seen the currency soften over the past year, mostly owing to Aussie Dollar weakness. The greater the gap between US and Australian exchange rates the more likely this trend will continue, so those following the strength of the Aussie Dollar should also pay attention to US monetary policy and this is something we can help our readers with should they wish.

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.

Expect major volatility for GBPAUD exchange rates

Overnight reports have emerged that  in the upcoming days the UK Prime Minister Theresa May will potentially offer a significant concession to the EU, which would potentially break the deadlock in the Brexit negotiations. The plan is for the UK to remain tied to European Custom laws once the transition period is over at the end of 2020. This wouldn’t be indefinitely, but until the UK manage to negotiate a deal in regards to the Irish Border, however its likely that the new plan would be in place at least to the next general election.

The problem for Theresa May, is that by extending an arm for the Europeans it will mean the UK  will struggle to negotiate trade deals globally and that is one of the arguments to why the UK are leaving the EU in the first place.

Personally I see this going one of two ways. If the Conservative party and the DUP back the PM’s plan, I believe a deal is close to being struck and therefore I expect the pound will rally short term. However if the PM does not get the backing from her party, I believe a vote of no confidence or a general election is closer than people think. If this was the case it could have a devastating impact on the value of the pound and Australian dollar buyers may have a bitter taste in their mouths for a long time to come.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@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.

Huge month ahead for Sterling vs the Australian Dollar with Brexit talks

The Australian Dollar has started to fight back against the Pound especially towards the end of the week in advance of this weekend’s Tory party conference.

During the last few weeks rumours are circulating that some Tory members are looking for a change in leadership especially the Pro-Remainers in the party.

Theresa May claimed last week during her televised statement that under her leadership there will be no second referendum so some in the party think that their only option is to remove her from power. However, this would be deemed as very dangerous politically and would open the door to Labour.

It will be interesting to see how the Tory conference goes this weekend as if there is more division in the party then I think we could see Sterling exchange rates lower as we begin the week.

There are two other huge stumbling blocks ahead for the Pound with the EU summit due to be held on October 18th. Just over a week ago the Chequers plan was rejected by the European leaders and as yet no other alternative has been offered so currently we are at a stalemate with the discussions which does not bode well for the Pound at the moment.

Depending on how the talks go in the next three weeks the EU may also hold an emergency Brexit meeting in November to try and get a deal agreed between both sides so there is a huge amount of volatility coming in the next few weeks so be prepared for any eventuality.

As we saw in June 2016 when the Brexit vote came out we saw huge losses for the Pound vs the Australian Dollar so I think we could see some huge movements if we do manage to get a deal agreed later this month.

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.

Having worked for one of the UK’s leading currency brokers for 15 years I am able to offer you bank beating exchange rates as well as help you with various contract types all with the aim of saving you money.

Please email me with a brief description of your currency requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

What can we expect with the Australian dollar ahead?

Private Sector Credit increased in Australia which is a good sign since it shows the private sector expanding. However it illustrates a worrying point over personal debt and credit, which has been a major hindrance to the RBA, Reserve Bank of Australia, in raising interest rates. Household debt to income is exceptionally high in Australia and many Australians could find themselves in negative equity too.

The Australian dollar could therefore find itself much weaker in the future as the RBA has to pause for thought in its plans to be raising interest rates. This is a domestic issue but we could also see more global issues weigh on sentiment, examples would include the Trade Wars and an economic slowdown in China. Expectations are for the Trade Wars to intensify, this would heap pressure on the Aussie dollar too.

The pound to Australian dollar rate is very close to the post-Brexit highs, nearing the 1.84 level seen in April. With the pound looking like it could easily come under more pressure following Brexit, clients with a position buying Australian dollars could be looking at a very good time to buy their currency. In the months and weeks ahead we are expecting to hear of more news on the Brexit which might derail sterling, Boris Johnson has released his Brexit manifesto this morning and whilst he has lost credibility in recent months, he could present a threat to GBPAUD rates.

Over the weekend we have the latest Conservative Party Conference where Boris Johnson will soon be attracting more attention. Could he trigger a fall in PM May’s position? Expectations are for a volatile pound ahead, if you need or wish to buy or sell Australian dollars this could be a key time to be making plans.

If you have a transfer to buy or sell Australian dollars then making plans in advance seems to be the best bet with all manner of outcomes possible. If you have a transfer to make, please feel free to get in touch for information to help with any decisions on the best rates to aim for and strategies to take.

Please email me Jonathan Watson on jmw@currencies.co.uk to learn more.

GBP AUD ahead of Conservative Party Conference (James Lovick)

The Australian dollar has come under a degree of pressure of late as trade war concerns continue to weigh heavy on the Aussie. The cooling property market down under with considerable falls seen in both Sydney and Melbourne are also attracting concerns from the Reserve Bank of Australia. While the markets are not expecting a property market crash bearing in mind the falls in house prices appear to be coming from two cities, the central bank will nonetheless be in no hurry to raise interest rates which could potentially slow growth.

Rates for GBP AUD are currently sitting at 1.8140 and the two biggest drivers for the pair will be Brexit and the ongoing US trade war with China. The Australian dollar is negatively impacted by the global uncertainty for a slowdown in global growth especially considering that China is such a major export market for Australia.

UK Prime Minister Theresa May was in New York yesterday speaking on Brexit as she tried to reassure business that a deal between Britain and the EU will be reached.

UK Gross Domestic Product figures are released tomorrow morning although the central focus in my opinion will be on the Conservative party conference this weekend. With so much to negotiate in these Brexit negotiations and the difficult task that Theresa May has in finding a deal that will work for the EU but also one that she can get through in parliament then there is considerable risk for the pound over these next two months.

An agreement is expected to be found although any clues as to whether the Chequers deal will fly or if another Canada type trade agreement takes preference will inevitably have a direct impact on the price of sterling exchange rates. With splits in the cabinet over a softer or harder Brexit then this conference in my opinion could give new direction for the price of sterling.

For assistance in transferring Australian dollars at the best exchange rates then please contact me James at jll@currencies.co.uk

Will GBPAUD remain above 1.80?

For clients buying Australian dollars with pounds, over the last couple of weeks opportunities have presented themselves. Arguably this is because the Australian PM was ousted and trade wars between China and the US is putting pressure on the commodity currencies.

However short term, Australian dollar buyers could be running out of time. After this weekend the Conservative Conference will start and we should find out the more about the Conservative party’s stance in regards to Brexit.

UK Prime Minister Theresa May has reinforced in recent weeks that her Chequers plan is the only option. However MPs such as Boris Johnson have called for the Prime Minister to forget her chequers plan and to adopt a similar approach to the Canadian free trade agreement.

Personally I expect the PM to come under further pressure and there will be further commentary in regards to a vote of no confidence. If this materialises and therefore there is any chance of a general election GPBAUD could be back trading in the 1.60s before long.

Any other news Governor of the Bank of England Mark Carney is set to deliver a speech in Salzburg tomorrow. Interest rates are set to remain on hold for the time being and I expect him to be cautious knowing that the conservative conference is fast approaching. It was only last week he stated 35% of the housing market could be wiped if there is a no deal, therefore this could be another sterling negative release.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your requirements. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.