Australian dollar at the mercy of global news!

The China – US Trade Wars have been a major factor driving the currency markets in the last 6-9 months, impacting the Australian dollar and the economy. Australian economic data has been mixed but with Chinese data reflecting a slowdown, particularly in Manufacturing, the Australian dollar has been softer.

Looking ahead there is lots of important news in the currency markets this week to move the Australian dollar, this includes information at home and abroad. Domestically we have the latest Australian CPI, Consumer Price Inflation, data to move the market. The Australian economy has been mixed and investors are still debating the prospect of interest rate hikes in the future.

Tomorrow is also important with the latest US Federal Reserve interest rate decision, which could be a market mover on the US dollar and thereby impact the Australian dollar. USDAUD is the most heavily traded pairing for the Aussie and any large movement on the USD can ‘weigh’ the Australian dollar down against other currencies.

Later this week we have the latest US-China trade war talks which could be a market mover in the future, clients with any AUD transfers should be keeping a very close eye on the latest news. The meeting this week might yield too much news since there is still a 1st March deadline for the talks to be finalised.

Finally, Friday is the latest US Non-Farm payroll data which might well trigger volatility on the Australian dollar, by altering global attitudes to risk and viewpoints on global trade. Clients looking to buy or sell the AUD should be very conscious of these developments which should see a very busy end to the week for the Australian dollar.

If you have a position buying or selling and wish to get a fresh update o the market and all the important issues driving your levels, please do get in touch to discuss the latest news with me Jonathan Watson.

Thank you for reading and I look forward to hearing from you.

Jonathan Watson

jmw@currencies.co.uk

GBP to AUD Rates before Key House of Commons Vote on Tuesday (James Lovick)

The pound to Australian dollar exchange rate has risen over the last week with rates for the GBP to AUD pair sitting above 1.83. The pound has benefited considerably from the markets beginning to feel more optimistic that a deal between Britain and the EU will be reached whilst the prospect of a no deal has been diminishing, for the time being.

With the Australian markets closed today for Australia day, tomorrow will be crucial in determining where rates for GBP vs AUD head next. Key parliamentary votes will be held in the House of Commons at 7pm tomorrow and it will be for the Speaker John Bercow to select which of the amendments the House will vote on. There are two amendments in particular and whether they are selected could help shape the direction for travel for GBP to AUD with currency volatility to be expected.

The Nicholas Boles / Yvette Copper amendment seeks to delay Article 50 in the event that a deal cannot be reached. It effectively removes no deal from the table as we approach 29th March. The other amendment which appears to have the support of government is the Graham Brady amendment which seeks to remove the controversial Irish backstop and replace it with alternative methods should an agreement on future trade not be reached.

These amendments are hugely important as they will help determine the path of Brexit and where it ultimately ends up which is of huge interest in the currency markets. Those looking to buy or sell Australian dollars will likely see a big market reaction on the outcome of tomorrows vote and could be presented with a good opportunity.

Bank of England Governor Mark Carney will be making a speech later today which could create some volatility for the pound ahead of such an important day tomorrow. Tomorrow sees business conditions data down under from National Australia Bank whilst Wednesdays’ Consumer Price Index inflation data could also help direct the Australian dollar.

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

Best rate to buy Australian Dollars with Pounds since October 2018 (Tom Holian)

The Pound is now trading at its best rate to buy Australian Dollars since October with the Interbank level touching above 1.85 for a brief period of time earlier on this morning.

During this week we have seen GBPAUD exchange rates improve by as much as 5 cents or the difference of £1,600 on a currency transfer of AUD$100,000 highlighting the importance of keeping up to date with what is happening on the foreign exchange markets at the moment.

Chinese economic data has shown a slowdown with GDP coming out at 6.4%, which although very impressive this is highlighting a slow down in the world’s second largest economy.

Chinese GDP hit its lowest level in ten years earlier this week and whilst the Trade Wars with the US continue to affect China this is also another reason why the AUD is struggling

As Australia is heavily reliant on what happens with the Chinese economy this is in part a reason for the weakness in the value of the Australian Dollar.

Another reason for the weakness of the Australian Dollar comes down to the level of interest available for the investor. Last year the US Federal Reserve hiked interest rates to 2.25% and with the Australian interest rate sitting at 1.5% investors are bypassing the Australian Dollar in favour of the US Dollar for more attractive rates of return on their investment.

As we turn the focus back towards the UK it appears as though the Brexit may continue to run and run with lots of speculation that the UK will extend Article 50 rather than leave the European Union on 29th March.

Since the start of December when the previous vote was postponed the most recent vote from early last week confirmed that a majority of 230 MPs voted against the current Brexit deal on offer.

At the moment the likelihood of MPs voting through the next plan appear very unlikely and this suggests that Article 50 will have to be extended unless the UK crashes out of the European Union with a no deal Brexit and this is why the Pound has made gains vs the Australian Dollar.

Having worked in the foreign exchange industry since 2003 I am confident of being able to offer you better exchange rates than using your own bank so if you would like a free quote when buying or selling Australian Dollars then contact me directly for a free quote and I look forward to hearing form you.

Tom Holian teh@currencies.co.uk 

 

 

GBP to AUD Finds Support – 66 Days to Brexit (James Lovick)

The pound to Australian dollar exchange rates has found support over 1.80 on the back of the latest Brexit developments which have helped lift sterling. The Australian dollar has also come under pressure over ongoing concerns for the Chinese economy. Chinese Gross Domestic Product figures released yesterday exacerbated the situation after China reported its lowest growth since 1990.

As the second largest economy in the world any downturn in China is closely scrutinised by the markets and the Australian dollar is heavily influenced as a commodity currency. Considering the size of Australia’s export market to China then any slowdown in the Chinese and global economy will normally be felt in Australia too. The Australian dollar could now be set for a weaker period ahead especially if trade tensions between the US and China over trade continue. US President Donald Trump has called on China to “stop playing around” and do a trade deal.

Brexit meanwhile continues to bring uncertainty for the GBP to AUD pair. UK Prime Minister Theresa May updated the House of Commons yesterday signalling the next steps having been defeated on a historic scale last week to include returning to Brussels to seek a better deal. The Labour party have tabled an amendment to try and force a second referendum, what is often referred to as a peoples vote, something the Prime Minister is not supporting having highlighted risk to social cohesion. Potential government resignations have also been reported if ministers are banned from voting for any amendments aimed at stopping a no deal Brexit.

UK employment data are released this morning and any improvement in wage growth numbers are likely to be seen as welcome news for the economy and hence the pound. Market reaction is likely to be limited with bigger Brexit news. For the pound to move higher and break away for these lower levels there does need to be some certainly over Brexit and these next few weeks will likely create major volatility and potential opportunity as the exit date of 29th March approaches.

For assistance in making transfers either buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk

Will the slowdown in China put pressure on the Australian Dollars value?

The main news within the financial markets this morning is the release of 4th quarter Gross Domestic Product from China. The figure is followed closely owing to its importance, as the Chinese economy is the 2nd largest globally and GDP data measures economic output.

The figure released is 6.4% year on year in the forth quarter, and this was expected. The headlines will centre on the annual figure which is now officially 6.6% through 2018 which is the lowest figure on record since 1990, almost 30 years ago.

Now that the annual GDP figure has been released the concerns surrounding a slowing Chinese economy have been confirmed, and this could spell trouble for the global economy with economies such as Australia’s likely to feel the pinch considering the extent to which the Australian and Chinese economies are intertwined. The negative effects of the US-China trade war can now been seen so hopes of a deal being stuck will be a high as ever, and it’s likely that the talks could impact AUD exchange rates as AUD could react to US-China sentiments.

From the UK side, this afternoon could offer GBP exchange rates some direction as UK Prime Minister, Theresa May will announce the governments Plan B now that her deal hasn’t made its way through parliament. The pound has dropped off slightly at the beginning of this week which is likely due to the anticipation of what will be said later. For now, cross party discussions have come to a halt as the leader of the opposition, Jeremy Corbyn has stated that we won’t talk until a no-deal is ruled out.

I think that this afternoon’s announcement is likely to drive GBP exchange rates to begin with and that the Irish backstop will be a major talking point regarding the new plan.

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.

The reasons why the Pound could break 1.80 this month against the Australian Dollar

The Pound has briefly touched 1.80 against the Australian Dollar this week but has yet to make a sustained break past this particular level of resistance. However, I’m confident that the Pound will keep knocking on the door of 1.80 before eventually breaking through before the end of this month.

The political uncertainty in the UK has actually done the reverse of what many expected to happen in terms of the value of Sterling.

Clearly the Brexit deal on offer is not something that MPs have much confidence in, which saw a majority vote of 230 against the deal. Since then, the Prime Minister Theresa May has managed to once again survive a vote of no confidence with the Tories and the DUP voting in favour of supporting the Prime Minister.

The reason why the Pound has found support against a whole host of currencies including vs the Australian Dollar is because it looks more and more likely that the withdrawal from the European Union with a no deal Brexit will not happen.

Theresa May has yet to confirm officially if the UK will rule it out and I think that she is doing so to keep her negotiating power as strong as possible when she next meets with the European Union.

It appears also that the UK will attempt to extend Article 50 as it is clear that neither the UK nor the European Union is ready for the end of March.

Even though the uncertainty as to what may happen next with the Brexit talks still exists the good news for the Pound is that the finite period before the end of March may not now happen and this either moves the UK towards a softer Brexit or perhaps even no Brexit if MPs do not manage to agree on the terms of any future deal.

The market will ultimately want trade not to be adversely affected and therefore this is why I think we will see the Pound break through 1.80 during January.

I have personally worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers and I’m able to offer you bank beating exchange rates so if you would like to save money then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Mixed messages on Trade Wars mystify AUD Exchange rates

The Australian dollar has been pulled from pillar to post as conflicting reports on the Trade Wars between China and the United States send mixed signals to the currency markets.  A report from the Wall Street Journal newspaper indicated the US might be ready to temper down some of the tariffs and their tone in the talks, to try to seek a resolution. This report was then quickly dismissed by the US Treasury Department, leading to the Australian losing value.

The Trade Wars are a major driver on the currency as investors seek to gauge the likelihood of Australia suffering any economic slowdown as a result of the expected slowdown in China. China is predicted to come off the worst from any developing tensions and a closely monitored Chinese Manufacturing survey earlier in the year indicated a slowdown. This saw the Australian dollar weaker and has set the tone for 2019 for currency so far.

We have expected a more negative twist and turn of events on the Trade Wars, Donald Trump is not the kind of person to easily step back from confrontation even where it causes harm. This attitude has seen the US Government enter its longest ever shutdown which has weighed heavily on sentiment and could put further pressure on the global economy.

Of benefit to the Australian dollar could be any quick turn resolution in sentiments but it does seem likely the Trade Wars will continue. Donald Trump’s actions will continue to be under scrutiny and he is unlikely to easily and quickly back down from the rhetoric that has driven the Australian currency lower.

Worsening economic data for the Chinese economy will only heap pressure on the Australian currency as investors have to weigh up the longer term prospects for economy in such uncertain global conditions. Whilst any surprise twists in sentiment could see pockets of Australian dollar strength it does feel that the general trajectory will be negative and the risks are to the downside with the currency.

Thank you for reading and I welcome any comments or business inquiries with regard to personal assistance with the timing and planning of any international currency transfers.

Thank you for reading and please contact me directly on jmw@currencies.co.uk to discuss further.

Pound to Australian Dollar Rates Move Higher Towards 1.80 (James Lovick)

The pound to Australian dollar exchange rate has moved higher towards 1.80 for the GBP AUD pair having found support after the historical vote in the House of Commons on Tuesday this week. UK Prime Minister Theresa May was able to win the vote of no confidence in the government which took place last night having been put forward by Labour leader Jeremy Corbyn. The Brexit negotiations continue to be the main driver for GBP to AUD and the markets now await a statement from the British prime Minister on Monday having lost her vote by a staggering 230 votes.

The pound has found some support as it is becoming increasingly clear that there is not a majority in the house of Commons for a no deal Brexit, even though the default option in the event of a no deal is enshrined in law. The markets at least appear to be feel more relaxed that a no deal is not a likely outcome anymore and this is helping to support the price of sterling. Clients looking to buy or sell Australian dollars are likely to see a hugely volatile period in these coming weeks ahead of the UK’s withdrawal from the EU 29th March 2019.

UK retail sales date are released tomorrow where a small drop is expected although the headline figure should nonetheless look healthy taking into account spending on the high street over the festive period. Next week sees important unemployment data which also includes the wage growth numbers, something the Bank of England monitors very closely to determine its monetary policy.

The Australian dollar meanwhile is also struggling as continuing concerns over global growth hamper AUD to GBP. With a serious trade war still yet unresolved between the US and China and evidence of a downturn in the global economy the Australian dollar could be set for some tough times ahead. There are talks of China looking to stimulate their economy through injections of cash and also tax cuts which could help see a boost of the Australian dollar although these measures may take some time to have any effect.

For more information on the Australian dollar and how to make the most of any opportunities when transferring funds then please feel free to contact me James at jll@currencies.co.uk

Sterling climbs as May’s Brexit deal is emphatically rejected

It’s been a volatile 24-hours for the GBP/AUD exchange rate, as the Brexit talks ramp up and the UK parliament decides how best in carry out the Brexit.

Late yesterday evening the UK Prime Minister, Theresa May’s Brexit deal was overwhelmingly voted against by Parliament. The amount of votes she lost by was in the top-end of expectations, as she lost by 230 votes with was a much larger number than many analysts had expected.

Since then, the leader of the opposition (Jeremy Corbyn of Labour) has called a ‘vote of no-confidence’ in the government which will take place this evening. May is expected to win as no members of her own government have announced that they will vote against her and the DUP Party of Northern Ireland has also offered their support.

Tonight’s vote at 7pm is the next step in the Brexit process that could impact the Pound’s value, but what happens next is now quite unclear. The existing government has 3-days to announce their plan-b which could also be a market mover, so if you wish to be updated in the event of a major market movement do feel free to register your interest.

The Aussie Dollar, like the stock markets in the region remain under pressure whilst we wait for more clarity on global growth and trade war concerns between China and the US. The GBP has regained a lot of ground against AUD recently and last nights vote has helped. The pair are currently trading in the 1.79’s so it will be interesting to see whether the pair will manage to break through the psychological 1.80 level.

Moving forward I expect to see the pair continue to be driven by Brexit related updates, although early tomorrow morning there will be a number of releases from Australia concerning new home sales and inflation data.

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.

GBP to AUD Exchange Rate Weakens after Chinese Yuan Strengthens (James Lovick)

The pound to Australian dollar exchange rate has fallen lower overnight with rates for the GBP to AUD pair falling to a low of 1.7653 this morning. As featured yesterday Brexit remains the dominating driver for the pound not just against the Australian dollar but against all of the major currencies. With Brexit appearing to be in stalemate and the continued pressure from opposition parties to seek other options such as a second referendum, general election or cancel Brexit, the list goes on; the uncertainty is putting added pressure on sterling exchange rates. The weekend will inevitably see all the big political beasts doing interviews with the political shows on the TV. Any clues as to what may happen next week could see a volatile start to next week ahead of the crucial parliamentary vote to be held on Tuesday.

As things stand the government is widely expected to lose the vote in the House of Commons on Tuesday. Following that she will now just have three days to return to parliament with a Plan B after she lost a vote in parliament this week which forces Theresa May to act swiftly. How Plan B might look is less than clear and the Prime Minister is reportedly keeping a tight lid on how things will play out from here. The lack of information would suggest a very volatile period for GBP vs AUD next week.

Whilst the pound is falling amidst Brexit uncertainty in these final stages of Brexit the Australian dollar appears to have been boosted following an appreciation in the Chinese Yuans value. As the Chinese currency strengthens this is often seen as good news for the Australian dollar which is a commodity currency and due to the fact China is one of Australia’s most important export markets.

The stronger Yuan is having a positive knock on effect on the Australian dollar. Chinese trade balance data released next week is a data release to pay close attention to as the markets have been showing serious concern as to the strength of the Chinese economy. The trade wars appear to be hitting China adversely and the Australian dollar is likely to be disproportionately affected by any changes in China.

For more information on the Australian dollar and for assistance in making transfers when either buying or selling Australian dollars then please contact me James at jll@currencies.co.uk