Australian Dollar liable to global stock market sell off and RBA warning leads to Australian Dollar weakness

The Australian Dollar has had a fairly choppy week so far this week, generally losing ground against most major currencies due to comments from the Reserve Bank of Australia that indicated that any interest rate hikes may be quite far away, and also due to global uncertainty in the stock market, seeing the Dow Jones and other indexes around the world drop considerably over the week.

The issue with the Australian Dollar is that it is perceived as a riskier currency, therefore when you tend to see a volatile global market, and uncertainty politically or with economic data  around the world you tend to see the Australian Dollar weaken, as investors will shy away from riskier currencies and head to safer havens, such as the U.S Dollar and the Swiss Franc.

As I indicated earlier in the week I do feel that the Australian Dollar may have a tough period coming up, with interest rates due to be raised by various central banks around the world this may lead to a further flow out of the Australian Dollar and into more attractive currencies with better returns on investment.

The RBA also released a monetary policy statement last night, and although economic data is still fairly good there are concerns around slowing wage growth and inflation rising too.

Poor wage growth and high inflation is a big issue for an economy, as it means the cost of goods and services is going up yet the amount the general consumer has to spend is not rising in line with it, another potential issue for the Australian Dollar going forward.

Not only do we offer up to date market information for our readers but we can actually help you with any currency exchanges too, with top foreign exchange rates and a smooth and efficient service. With over ten years of experience in foreign exchange I would like to think I could be an excellent addition to your armoury when taking on these volatile markets. Feel free to contact me (Daniel Wright) directly on djw@currencies.co.uk and I will be more than happy to help you personally or to get you a live quote.

BOE comments causes Sterling Spike (Daniel Johnson)

GBP/AUD – In Depth

Sterling has struggled against the Aussie following the decision to hold a referendum to leave the EU. GBP/AUD sat above 2.20 pre referendum and of late has been mired in the 1.70s. We have seen a recent spike for Sterling which can be atributed to several contributing factors.

Although there was a recent surge in retail sales figures from down under the spike for the Australain Dollar did not last long, as predicted it was an an anomamly that could be put down to Black Friday sales and the release of the iphone X.

Since then the Reserve Bank of Australia (RBA) have indicated that they will keep interest rates on hold for the considerable future the Aussie has lost value. This can be justified due to the infalted property prices in high wage growth areas. Foreign investors are willing  to pay these prices as investments but it is causing the locals to struggle spending the majority of their funds on neccesities rather than luxury goods. This does not bode well for the Aussie.

The recent surge to 1.79 was caused by hints from the Bank of England (BOE) there could be a rate hike as early as May 2018. The market moves on rumour as well as fact and investors bit.

It is important not to have too high expectations if you are an AUD buyer however, the uncertainty surrounding phase two of Brexit talks has the potential to hurt the pound. Davis and Barnier are far from being on the same hymn sheet.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

 

Where Next for the Australian Dollar – Stock Market Crash Impact (James Lovick)

The Australian dollar has seen a very volatile week with lots of events happening globally since Monday which have had a direct and considerable impact on the strength of the Aussie. The Australian dollar has come under pressure after $66 billion was wiped off Australian shares earlier in the week following a global sell off with considerable losses also seen in the US and UK stock markets.

The Australian dollar which is regarded as a commodity currency normally comes under pressure in times of global uncertainty and this happening again now. This new wave of uncertainty in the global economy could see further problems for the Australian dollar and the Aussie may have further to fall.

However the Reserve Bank of Australia may intervene before that happens and any signal from the central bank that it is keen to raise interest rates later this year could see the dollar bounce back. Clients looking to buy Australian dollars are seeing some excellent buying prices which have stemmed from the perceived extra global risk and there may be some more gains to be had in this rally. Any further shocks from the US are likely to result in further weakness for the Aussie.

GBP AUD

Rates for GBP AUD have seen a good week with levels for this pair now sitting at around 1.77. The Bank of England meet tomorrow to discuss interest rates and any change in policy could see movement for sterling exchange rates. The Bank of England Governor however is more likely to cause a market reaction on the back on any commentary on Brexit. The central bank is unlikely to make any changes to interest rates although any suggestion that there is likely to be a rate increase later this year should help support the pound.

Clients looking to buy or sell Australian dollars would be wise to get in touch to take advantage of any spikes in the market which si something we can help you with. Please feel free to get in touch with me at jll@currencies.co.uk

Interest Rates in the UK and Australia to set the tone for GBPAUD exchange rates – Could we see GBPAUD rates move towards 1.80? (Tom Holian)

According to the Reserve Bank of Australia interest rates down under may be kept on hold for quite some time. In their most recent statement earlier this week the central bank has suggested that any change will be ‘gradual.’

The latest set of growth forecasts from the RBA will be announced on Friday and although unemployment is looking very strong in Australia there are concerns being raised that Retail Sales are struggling.

Indeed, the RBA governor Philip Lowe has said that ‘household incomes are growing slowly and debt levels are high’, which leads me to think the RBA will keep monetary policy the same until we see more positive news.

The last time we saw an interest rate hike in Australia was back in 2010 and rates have remained on hold down under now for a year and a half so don’t expect any rate changes to be coming anytime soon.

The problem for the economy in Australia is that over the years it has benefited from a higher yield in interest rates for global investors than many other developed economies.

However, with the US having increased interest rates three times during 2017 and on course to increase interest rates again in March this is leading investors to move their money away from commodity based currencies including the Australian Dollar and into the US Dollar.

Overall this is fairly good news for anyone looking to send money to Australia as it means GBPAUD exchange rates have remained positive recently and although we have seen the odd drop in rates, generally speaking the direction has been positive in Sterling’s favour.

Looking ahead to tomorrow the Bank of England are set to meet to announce their latest monetary policy decision and although no change is expected any hints of a rate hike coming further down the line to control inflation could see the Pound go in an upwards direction.

If you have a need buy or sell Australian Dollars in the near future then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

Bet against the Australian Dollar in 2018? It appears many are doing just that!

The Australian Dollar has not had the worst start to 2018 but it does appear that many major banks and institutions are not expecting AUD exchange rates to have such a good year.

We must be wary that we have seen this a couple of times over the past few years with the vastly predicted Chinese slowdown that still does not appear to have come along.

This time however there are multiple sources out there suggesting a drop in value and the reasons are far more justified and likely. The RBA appear to be holding off on any rate changes for the first part of 2018 compared to various other economies around the world looking to raise rates. An interest rate hike is generally seen as positive for a currency so this may lead to money moving out of the Australian Dollar and into more currencies such as the USD should the States raise rates numerous times in 2018.

There is an expectation of commodity prices dropping off throughout 2018 too, with Iron Ore being one of the most notable for the Australian Dollar, with this being one of the larger exports for Australia this is expected to impact export income which may have a knock on effect to the economy.

Finally, Morgan Stanley have also been advocating that clients should consider taking a position for the Australian Dollar to lose ground against the Euro and many others have commented that losses against the Dollar have been spoken about by various financial institutions.

In my opinion I would not be surprised to see Australian Dollar exchange rates to have a fairly poor year, however we do need to also remember that the Australian Dollar does appear to have a fairly strong backbone and the RBA can change their stance regularly so this is still very much a currency to watch very closely.

Currency exchange to make in the near future?

If you need to make a large exchange, involving the buying or selling any major currency then it is key that you get in touch with us to see if we can save you money. This site has been running for over 7 years and I have personally dealt with thousands of new clients that have found they can get a better rate through us rather than their current brokerage, we like the think the service is much better too.

If you would like a quote or to discuss plans for a future transaction then you are welcome to contact me, Daniel Wright, the creator of this site personally. You can email me on djw@currencies.co.uk with a brief description of your requirements and I will be more than happy to get in touch with you to run through exactly how I can help and what rates we can offer.

GBP/AUD remains at 1.77 after RBA opts to hold interest rates (Joseph Wright)

The Reserve Bank of Australia last night chose to keep interest rates unchanged, which was the expected outcome from economists leaving the currency markets unchanged at 1.5%.

This was the first chance the RBA had to make a change this year, and the base rate has remained at 1.5% for around a year and a half now. Many central banks have opted to hike interest rates in recent months, and should this continue it will result in the Australian interest rates being uncompetitive and therefore AUD weakness in my opinion.

Last year AUD benefited from offering one of the highest interest rates in the developed world. Investors are keen to hold funds in a high yielding currency but should AUD lose its competitive edge, it’s likely that money will be taken out of the Aussie Dollar and we’ll see it fall.

Politics also have the potential to move the GBP/AUD pair, especially at the moment as the European Union’s chief Brexit negotiator Michel Barnier is in London to discuss the UK’s plans and proposals for Brexit this week.

Those following the Pounds value should be aware of this and the potential it has to impact GBP exchange rates should any key comments be made, and do feel free to register your interest with me if you wish to be updated in the event of a major rate spike.

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.

RBA interest rate decision and press conference overnight, along with retail sales, import and export figures too

We have plenty of market data for the market to get stuck into this week, with the Australian Dollar struggling a little recently this may also lead to further weakness for the Australian Dollar unless we hear some positive news.

There have been numerous analysts commenting recently that they felt we may see a slight period of turbulence for the Australian Dollar and one of the reasons behind this had been expectations of very little interest rate movement throughout 2018.

A higher interest rate is generally good for the currency concerned as it makes it more attractive to investors. The Australian interest rate spent quite some time being much more beneficial than that of most other majors which is why the Australian Dollar has remained so strong over the past few years.

What we are seeing now is that other major economies (such as the U.S and U.K) are starting to raise their interest rates, most notably the U.S and this is leading to investors moving their money out of the Australian Dollar and into the U.S Dollar, thus weakening the Australian Dollar and making it cheaper to buy.

Expectations are for three further interest rate hikes from the U.S this year and with both the U.S and Australian interest rate sat at 1.5% a further move from the states may lead to this flow of money out of AUD as explained above.

This is why focus is on the RBA and their Tuesday interest rate decision, no changes to rates are expected but it will be comments in their following statement that will be watched very closely, as any hint in future rate changes (or that they plan not to make any changes this year) may lead to sharp Australian Dollar movements.

The other economic data will also be important, but I feel that the star of the show will be any news on the next move from the RBA.

If you have a currency exchange to make in the coming days, weeks or months ahead and you would like assistance then I can help you. Having working at my current brokerage for over ten years I am in a good position to not only help you with the timing of your transfer but also getting the best rate of exchange when you do come to book it.

For more information or simply to get a quote on the rates that we can offer feel free to email me (Daniel Wright) personally on djw@currencies.co.uk and I will be more than happy to get back in touch with you.

Could the RBA meeting on Tuesday be the catalyst to send GBPAUD rates up to 1.80 next week? (Tom Holian)

The Pound has maintained its recent run of good form vs the Australian Dollar during the course of the week ending Friday afternoon with the Interbank level trading at above 1.78 for GBPAUD exchange rates.

Australian inflation data came out lower than expected earlier this week and as we have seen with the UK back in November if inflation rises then the general policy is to raise interest rates.

With inflation down under falling then this means that the Reserve Bank of Australia are much less likely to be looking at raising interest rates in the near future.

On Wednesday evening the US Federal Reserve confirmed that they would be keeping interest rates on hold for the time being although the tone was rather hawkish, which means that a rate hike could be coming.

Indeed, the expectation is currently at 88% that an interest rate hike may occur in March and this is why we have seen the Australian Dollar continue to remain weak.

Global investors are currently offloading the AUD, NZD and ZAR which typically used to have very attractive yields on interest.

However, with the US looking at increasing interest rates as well as having a very strong economy as proved with Friday afternoon’s fantastic jobs report creating 200,000 new jobs in January, money is being ploughed into the US at the moment.

On Tuesday, Australia releases its latest Trade Balance Figures as well as Retail Sales and both will be key to determining what will happen to GBPAUD exchange rates during the course of next week.

The RBA will also announce its latest interest rate decision so if they are quite cautious in their approach could this send GBPAUD rates towards 1.80?

If you have a need to make a currency transfer buying or selling Australian Dollars in the near future then feel free to contact 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

Sterling remains strong despite poor data release (Joseph Wright)

The Pound has managed to hold its ground against the Aussie Dollar today, despite some disappointing data being released earlier today.

It’s emerged that the UK construction sector is relatively flat at the moment, and this is similar to the UK manufacturing sector which also saw disappointing data released recently.

Despite this, the Pound is managing to hold onto its recent gains where the currency has moved up into the later 1.70’s after spending much of last year below 1.70. This suggests to me that the Pound has consolidated at its current levels and I think that there is more of a chance of seeing the pair hit 1.80 than 1.70 recently.

I think the Pound has also been helped by Aussie Dollar weakness which has restricted AUD from regaining any ground. An interesting estimate released recently is that there are forecasts of a 20% decline in iron ore prices throughout 2018, and this comes after the commodity lost quite alot of value recently already.

The reason this is significant is because iron ore is one of Australia’s biggest exports, so therefore a drop in the commodities value is likely to result in a drop in export income for the country.

Those watching this pair should also consider that if there is more talk of a rate hike from the Bank of England in May, we could see Sterling climb even higher.

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.

AUD Forecast – Will Sterling’s Recent Upturn Continue? (Matthew Vassallo)

GBP/AUD rates are trading around 1.78 on the exchange this morning, with the AUD seemingly finding support around this level.

The Pound has found a foothold above 1.75 over recent weeks, with investor confidence seemingly returning to the Pound despite the on-going uncertainty around Brexit.

Whilst the Pound has made positive inroads of late, the current trend may not be sustainable as we head into a key phase of the Brexit talks.

Poor UK Manufacturing data yesterday did little to further boost Sterling’s value, with the Pound struggling to make any impact above 1.78 against the AUD.

With the global markets seemingly improving , there is also an argument to say that investors risk appetite will improve alongside it. Usually this means than they will move funds from the safer haven currencies such as the USD & CHF, into more risky and potentially higher yielding currencies such as the AUD or NZD.

It is interesting to note that the USD has declined of late in line with this theory and it could be that the AUD is in line for a positive run over the coming weeks.

Whilst the currency markets are extremely difficult to dissect, particularly in times of uncertainty, I am not convinced that Sterling will continue on an upwards aggressive curve.

The Australian economy continues to perform well and being a commodity based economy, relies heavily on the export of its vast supply of raw materials. With its largest trading partner China showing no signs of an economic slowdown, this is likely to help support the Australian economy and ultimately the AUD over the coming months.

The Reserve Bank of Australia (RBA) will not want to see the AUD’s value soar, of fear of alienating their trade partners but this undertone is likely to be offset by the on-going concerns surrounding Brexit and its outcome.

These concerns were laid bare by a leaked Government report earlier this week, which indicated that the UK will be worse off after Brexit. The report covered all three Brexit scenarios, including a free trade agreement, access to the single market, or the worst case scenario of no deal being reached at all.

The Government were quick to react and said the findings were only a preliminary assessment but the news is hardly likely to inspire confidence amongst investors.

Therefore despite the Pounds positive run  further pressure over the coming days and weeks is a distinct possibility, as  Brexit talks starting to dominate the headlines once more.

If you have an upcoming GBP or AUD  currency transfers 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 inning 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.