The narrative on Australian interest rate changes is deteriorating to the point that Pound to Australian Dollar rates are beginning to visibly benefit, with GBP/AUD breaching 1.67 briefly for the first time since January.
Risk-aversion is now the name of the game, and we’ve seen riskier currencies whose value is largely tied to the commodity markets (oil, mining ores etc) losing ground against the Pound. The Australian Dollar has lost close to two cents on GBP/AUD in 24 hours of trading, and the likes of the New Zealand Dollar and Canadian Dollar saw similar losses.
Firstly, the Australian Dollar had already been softening since the beginning of the week now that reports during March of a potential interest rate hike in the Australian economy have been debunked, with wide expectations now that the idea of a further interest rate cut is a more likely prospect.
So why the sudden turnaround? Future demand has come into question, mainly due to increased tensions in the Middle-East and the lackluster performance of the Chinese economy as of late.
But the key turnaround has also come from currency speculators. Since the US active intervention in the Syrian conflict we are now seeing rife risk-aversion, resulting in mass-sell-offs of riskier currencies such as the AUD in favour of gold and safe-haven currencies such as the Swiss Franc and the Dollar. There is a reason that the Australian Dollar is at its lowest value against the USD since the middle of January.
So at the moment, for Australian Dollar buyers your future fortunes largely depend on the result of US talks with Russia beginning tomorrow. However, despite poor UK inflation data this morning rates are still moving in your favour with this dominant Syrian narrative. Thus it seems sensible to expect further improvements for AUD buyers at least in the run-up to Easter.
Australian Dollar sellers are now in a race to try and secure a sell price below 1.70.
If you are planning to make a currency exchange involving the Pound and the Australian Dollar, it’s well worth your time getting in contact with me on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.
In an evolving political situation, a premium is put on being in touch with market movements on a continual basis, and this is part of my role here as a trader to keep my clients informed of opportunities and any sharp or gradual changes in currency trends.
Australian Dollar starting to weaken off as interest rate hike chances start to fade (Daniel Wright)
The Australian Dollar is having a slightly rocky time of it at present, due to investors and speculators starting to reverse their opinion that they expected an interest rate hike from the RBA fairly imminently.
The original expectation that the interest rates may rise was due to the economy being in good form and the housing market also rising fairly rapidly, an interest rate rise would help to slow this slightly as it makes it more expensive to get a mortgage therefore should hold demand back a little.
It does appear now that with iron ore prices dropping near to the lows of the year and concerns about China creeping back into the market we may have a slightly shaky period ahead for those holding Australian Dollars, and that Australian Dollar exchange rates may fall in the coming weeks, making the Australian Dollar cheaper to buy.
There are now speculators and investors that expect an interest rate cut from the RBA before the end of the year, this would lead to a large drop in the value of the Australian Dollar. An interest rate cut is generally seen as negative for the currency concerned and a rate hike seen as a positive.
With the decreasing difference between U.S and Australian interest rates too, this is having more of an impact than it usually would as investors would rather have funds sat in USD than AUD as it is perceived as a less riskier currency.
If you have any Australian Dollars to buy or indeed sell then it is well worth getting in touch with us here at Australian Dollar Forecast. Not only to we aim to provide up to date market information but we also all work for on of the top foreign exchange brokerages in the U.K. Even if you are based in Australaia we can still help you too, and we pride ourselves on being able to better the prices of all of our competitors, along with offering a high level of customer service too.
Feel free to get in touch with me (Daniel Wright) if you would like to get a quote to compare with your current brokerage, or indeed your bank and I will be more than happy to contact you personally. You can email me on email@example.com and I will be in touch as soon as I can.
Exaggerated Property Pricing hinders the Australian Dollar
The pound suffered against the Australian Dollar on Friday due to poor manufacturing and industrial data. Sterling has been rallying against the majority of major currencies since the invocation of article 50 and more confidence has returned to investors due to more certainty regarding trade negotiations post-brexit. Sterling has made more significant gains against the Australian Dollar however due to concerns over the considerable rise in property prices down under. There is the feeling that exaggerated house prices could hinder domestic growth.
Melbourne and Sydney are the main culprits. It is a similar situation to that of London, with more people being drawn to the larger cities in the hope of a higher wage. The Reserve Bank of Australia (RBA) may keep monetary policy accommodating as house prices continue to rise.
Home loans data and investment figures are both down and the Aussie has also faltered against the US dollar, hitting a three month low. The Syrian air strikes could also have been a catalyst as investors leave riskier currencies for safe havens such as the green back or the Swiss Franc.
UK Inflation could cause volatility on the exchange
Inflation data in the UK is due out tomorrow and could cause movement on GBP/AUD. The weak price of the pound has caused imported goods to rise in price and these increases could hit consumers. If there is a rapid rise in inflation without an increase in the average wage it will prove detrimental the UK economy. Keep a keen eye on this release.
If you have a currency requirement I will be happy to assist. It is vital to be in touch with an experienced broker in order to maximise your return. If you let me know the currency pair you are trading, the size of your trade and your time scale I will endeavour to produce a trading strategy and the correct contract to suit your individual needs. If you have a currency provider already I will happily perform a comparison and I am very confident I can demonstrate a considerable saving. I am happy dealing with commercial trades, but my speciality is property transfers. I can ensure the whole process runs smoothly and cost effectively, taking the stress out of your purchase or sale for that matter. We have been in business for over sixteen years and are regulated by the FCA. Please do get in touch if you would like my assistance. I can be contacted at firstname.lastname@example.org. Thank you for reading and I look forward to hearing from you.
Throughout Friday mornings trading session the missile attacks on Syria, sent a worrying message throughout the currency markets and the Australian dollar (a commodity currency) devalued. In times of uncertainty its a common trend for commodity currencies to devalue as they are seen as a risk. A strategy for speculative currency traders is to sell off their positions and purchase ‘safe haven’ currencies such as the US dollar or Swiss Franc. Looking ahead if further unexpected attacks take place in the upcoming weeks I expect the Australian dollar to continue to lose value.
Interest rate cuts on the horizon?
As our regular readers are aware Australia heavily relies on China and Paul Dales Chief Australian and New Zealand economist for Capital economics expects the RBA will make cuts to interest rates before they are hiked as forecasters are predicting a slowdown in China int the near future. This does not surprise me as it appears the monetary policy program has eased which is now not having a positive impact and China’s debt now exceeds 250% of GDP.
Time to sell Australian dollars and buy sterling?
If you are emigrating to the UK from Australia or purchase goods and services from the UK, I believe now is the time to make the purchase. UK Prime Minister Theresa May has brought certainty to the pound by triggering Article 50 and a slow down is on the horizon for China. Unless Brexit negotiations break down at the first hurdle, present exchange rates could be the best we are going to see for some time.
For readers that are converting Australian dollars into sterling for the first time, if the UK public had not voted out of the EU, exchange rates could have still been close to 2 to 1, which means you would receive 35 cents less. To put this into monetary terms on a 400,000 Australian dollar transfer you would have received over £40,000 less.
Are you needing to buy or sell Australian Dollars in the upcoming weeks, months or years? If you are I can help you save money…
The currency company I work for has won numerous awards for exchange rates therefore it enables me to trade Australian dollars at rates better than other brokerages and high street banks. I would recommend sending an email with a brief description of your requirements and your timescales (this is very important, the length of time you have will change your options) and I will email you with my strategy and the process of using our company email@example.com.
The rate to buy Australian Dollars with Sterling has fallen from its 3 month high earlier this week after the UK posted worse than expected economic data.
UK Industrial & Manufacturing data both showed a fall in March which led to the Pound weakening against the Australian Dollar after getting close to 1.66 not seen since January.
As well as this data UK GDP data published by the NIESR showed a rise for the last 3 months of 0.5% but this did little to inspire the market.
Bank of England governor Mark Carney’s speech earlier today also suggested that the City of London’s financial institutions need to prepare themselves for all eventualities when the UK formally leaves the european Union.
With the triggering of Article 50 made last Wednesday it is not yet clear how the negotiations will go although they are pencilled in to begin later this month.
I think it will be very difficult for the UK to be successful with the negotiations as Europe has already been struggling to make a trade deal with the US since 2013.
With the UK due to make 27 new trade deals with all the current European Union members I cannot see how this can be completed in the current 2 year timescale.
On Tuesday UK inflation data is due out and this is likely to provide further volatility for Sterling vs the Australian Dollar so if you have a transfer to organise make sure you keep a close eye on this announcement on Tuesday morning.
Having worked in the foreign exchange industry since 2003 I am confident of being able to offer you bank beating exchange rates as well as helping you with the timing of your transfer.
If you have a currency transfer to make and would like to save money when buying or selling Australian Dollars then contact me directly for a free quote and I look forward to hearing from you.
Tom Holian Tom Holian firstname.lastname@example.org
The pound to Australian dollar rate has improved further to the highs seen in January almost touching 1.66. There is some important economic data due out today which could easily change the picture on the rates with UK Industrial and Manufacturing data due at 09.30 am and then an estimate of GDP (Gross Domestic Product) at midday. If you are looking to buy Australian dollars you are currently 7 cents higher than the lows that were established below 1.60 earlier this year.
With markets now eagerly awaiting the latest news on the UK economy the big challenges ahead will be the extent to which the UK weathers any poor economic data or the likelihood of any interest rate hike or cut in Australia. Recent comments by the Reserve Bank of Australia indicate that a cut is more likely which could present yet further opportunities for Aussie buyers in the future.
With the market squarely focused on the US too, economic data today could trigger some movements on the Australian dollar. Any speculation the US might be looking to raise interest rates sooner than expected could weaken the Australian dollar as investors sell off Aussies and increase their holdings of the US dollar. The key US data is Unemployment and Non-Farm Payroll data at 13.30 UK time, it will be closely watched by investors and could easily trigger some movements on the GBPAUD rate.
GBPAUD is up at some of the highest levels we have had since January which is presenting a great opportunity for Australian dollar buyers. If you have a transfer to make in the coming days and weeks these rates will not be around for long. To discuss the latest trends and themes which will move your exchange rate please speak to me Jonathan by emailing email@example.com.
The Australian dollar has come under some renewed pressure following the Reserve Bank of Australia’s interest rate decision on Thursday. As expected the central bank held rates steady at 1.5% but its tone on the future outlook was not as positive as expected resulting in some dollar weakness.
Data is light from Australia as we end the week so focus now moves to Australian business confidence numbers released on Tuesday.
UK data however is likely to see further volatility for GBP AUD after the National Institute for Economic and Social Research release their GDP forecast tomorrow afternoon. The numbers represent an excellent precursor to the official numbers released later in the month.
GBP AUD, Brexit & the French Election
The pound has rallied well against the Australian dollar making decent gains with rates almost breaking through 1.66 for this pair.
British politics surrounding Brexit will continue to be the single biggest driver for GBP AUD exchange rates and any confrontation between Britain and the EU in these coming weeks and months could see the pound weaken sharply. This is only the start of a long and extremely complicated negotiation which already has not gone off to the best start with the Gibraltar mix up. Those clients looking to buy Australian dollar may be wise to consider taking advantage of the current spike we are seeing for this pair.
For anyone that is hoping sterling exchange rates will move higher in my view would need to see a big problem in either Australia or the Eurozone for this to happen. The French election is one such consideration. Should Presidential candidate Marine Le Pen win the French election then the pound in my view would rally against most currencies including the Australian dollar. However, the polls are putting Emmanuel Macron in the lead so it is not very likely that Marine Le Pen would win. Those clients willing to take a punt should be aware of the potential opportunity if it happens! With both Brexit & Trump proving many wrong then I would not rule anything out.
If you would like further information on Australian dollar exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on firstname.lastname@example.org
GBP/AUD rates have remained range-bound over recent days, with the Pound struggling to break through 1.65.
The AUD has found plenty of support around this level, despite the Pound gaining a foothold against most of the major currencies since last week’s historic events.
It seems as though investors are still airing on the side of caution when it comes to the UK economy and its prospective future prosperity following the start of our separation form the EU.
It’s a strange time in the currency markets however, as investors and clients alike must start to look forward following the triggering of Article 50 last week. Many clients are asking me how the Pound will react over the coming weeks and I still feel that any clients holding Sterling should be looking for short-term market opportunities whilst the current uncertainty remains.
Its seems as though so much talk and focus was centred around the UK’s Brexit since the unexpected referendum result last June, that people almost forget that there was an active market prior to this point. It does feel like there is something of anti-climax about the whole situation but I’m convinced that talk of Brexit and the negotiations between the UK government and EU regarding terms of the separation will still fill column inches and dominate headlines for months, if not years to come.
However, we also need to move ourselves away from the topic to some extent, as the markets will start to look at other factors and it be that economic data (which is predominantly what drives the currency markets) will start to hold more weight again as we move forward.
Personally, I still feel that the investor confidence in the UK economy is not strong enough to sustainably push GBP/AUD rates towards 1.70. However, any positive developments regarding the UK’s separation and any deals still in place with the EU will probably benefit those clients holding Sterling and inadvertently weaken the AUD as a result.
The AUD has performed well against the Pound for some time but with China’s demand for their huge reserves of iron ore slowing and high labour costs in the mining industry putting pressure on the Australian economy, now could be the time to sell any AUD positions.
Client should to take advantage of what are extremely attractive levels, especially when you consider the history on the pair and not gamble on what has become an increasingly volatile market.
If you have an upcoming GBP or AUD currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest developments regarding Brexit and beyond.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on email@example.com.
Australian Retail Sales for February came out lower than expected yesterday at -0.1% compared to the expectation of 0.3% and bad weather down under has been blamed for the lackluster data.
However, the main news overnight was that the Reserve Bank of Australia has decided to keep interest rates on hold for the 12th month in a row. Indeed, the latest forecast is that interest rates are likely to be kept on hold until some point next year.
The real issue for the RBA is that the central bank are in a bit of a quandary as to how to control the already over inflated property market in Australia.
According to RBA governor Philip Lowe household borrowing is now a lot more than household income which is clearly a concern but an interest rate cut could cause more demand for the property market sending prices even higher.
In the meantime the UK posted worse than expected manufacturing data yesterday morning for March which caused the Pound to weaken marginally against the Australian Dollar.
Since the trigger of Article 50 last week the GBPAUD exchange rate does not appear to have made its mind up which way it will go.
On Thursday China releases its latest set of Services PMI data so anything lower than expected could cause the Australian Dollar to weaken vs the Pound.
Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident that not only can I offer you better rates compared to using your own bank but also help you with the timing of your currency transfer.
If you need to buy or sell Australian Dollars and would like further information or a free quote then contact me directly and I look forward to hearing from you.
Tom Holian firstname.lastname@example.org