Will GBPAUD rates rise or fall in the coming weeks?

I would be surprised to see the pound making big further gains against the Australian dollar since the prospect of the triggering of Article 50 is looming large in the coming weeks. The passage of the bill to trigger Article 50 is making its way through parliament and the House of Lords, most expect that the bill will pass but there is plenty to be conscious of to trigger sterling weakness.

Most commentators expect that the pound will therefore struggle particularly as economic uncertainty also starts to bite. If we do not look to the slightly deteriorating economic data on Retail Sales the political uncertainty itself is likely to be a big drain on the pound in the coming months. Another factor is of course what is happening in Australia with the upcoming  economic data there. The Chinese economy appears to be going from strength to strength which combined with improvements in the prices of commodities is also leading to a much stronger Australian dollar.

Many analsysts believe that the Australian bank will no longer be seeking to cut interest rates and will instead be looking to raise interest rates at some point in the future once the Australian economy shows real signs of improvement. The overall factors that will I believe influence the rates are continued changes in the rate of Inflation in Australia. Notably the market is closely monitoring the situation for any signs that the bank will be forced to raise rates. Of course one thing the Australian bank do not want is a overly strong currency so this is something to also watch out for.

On the whole it seems the market will favour a stronger Australian dollar as investors predict their interest rate will rise at some point in the future. If you have a currency transfer to consider why not speak to me Jonathan Watson about everything that is happening to move your exchange rate? Please email me on jmw@currencies.co.uk to get a full overview of the market and your position.

Sterling Struggling to Make Sustained Impact Against AUD (Matthew Vassallo)

Whilst the Pound has gained some positive momentum against most of the major currencies recently, it’s struggled to make any sustained impact against the AUD over recent weeks.

GBP/AUD rates spike aggressively earlier this week, with the pair moving back towards 1.64. However, following better than expected employment data overnight the AUD has found support hitting a high of 1.61, before retracting to around 1.62 by close of European trading.

However, we did see it hit a high of almost 1.65 last week but struggled to make any further inroads and it seems to be marooned under 1.70 for the foreseeable future. This has become a key resistance level on the pair and based on the on-going uncertainty surrounding the UK’s Brexit, it may be that the Pound will struggle to break through this threshold anytime soon.

The AUD has benefited from a run of positive economic data and the uncertainty surround the UK economy at present. The Pound is continuing to be stabilised by Brexit talk and even if Theresa May gets her wish and Article 50 is triggered in March, how we will facilitate our exit over the coming months & years could be seen as negative by the markets, depending on the deal she is able to achieve.

However, due to the fact the AUD is a commodity based currency and as such relies heavily on its export trade, in particular the export of its raw materials to China, any global slowdown in this sector will hit the Australian economy hard and the AUD would likely lose value as a result.

Therefore I would be looking to take advantage of the current highs for AUD sellers and not gamble on what has become and extremely unpredictable and volatile market.

If you have an upcoming AUD currency transfer to make and are concerned about the current market instability, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact us on 0044 1494 725 353 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk and can answer any queries you have about the current market trends & forecasts.

Australian Dollar Strength after Stronger Unemployment Numbers (James Lovick)

The Australian dollar received a boost over night following an improvement in Australian unemployment. Unemployment fell by 0.1% in January from the month prior although the market reaction has been somewhat short lived. The Australian economy has remained incredibly resilient in recent months and has been further supported by stronger economic data from China earlier in the week. Chinese inflation climbed rapidly to 1% in January which was 0.7% above expectation

The Aussie is impacted not just by events in China but also the US. The Trump administration is still finding its feet having being dogged by Russian scandal and court cases over migration. It is only a matter of time before President Trump starts to introduce his major policies which are believed to include a huge infrastructure project domestically whilst foreign policy will also be one area to watch.

The path of US interest rates will also be a major factor for Australian dollar exchange rates. After Janet Yellen’s speech to congress this week it is widely expected that there will be an interest rate increase in March from 0.75 to 1%. This is important as there is likely to be a flow of funds back to the US dollar away from the commodity currencies to include the Australian dollar. As such there is a good chance the dollar could weaken from its recent highs.

Meanwhile for GBP AUD Brexit fast approached with a date for invoking Article 50 expected in March. Those clients looking to buy or sell Australian dollars would be wise to get in contact at the earliest opportunity in advance of the approaching political events. There is likely to be considerable volatility in these coming weeks which is likely to present some excellent opportunities for buyers and sellers alike.

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 jll@currencies.co.uk

Pound to Australian Dollar exchange rates fairly stable following a difficult Tuesday (Joshua Privett)

Pound to Australian Dollar exchange rates were buffeted earlier this week and are now holding close to these four week lows where rates were in January. At least the falls are not continuing, but this resistance level may not last for long.

GBP/AUD fell by two cents on Tuesday following surprising data emerging from China overnight.

Due to Australia’s close trading relationship with China, any news coming from there, whether positive or negative, will have some effect on the value of the Australian Dollar.

In this case, extremely positive news meant that confidence in the Australian economy soared in the very early hours of Tuesday morning in the UK, with the resulting boost on the Australian Dollar against the Pound driving GBP/AUD back down to 1.61.

This is largely where we have remained despite the choppy market visible today.

Moving forward we have Australian employment data overnight tonight which is expected to be fairly underwhelming, so barring any surprises we may see more attractive buying opportunities for anyone with a Pound to Australian Dollar interest by tomorrow morning.

However, moving forward similar pressure can be expected on GBP/AUD, but largely from the Sterling side of the pairing.

Given that the debate on Parliament’s role in the Brexit which has supported Sterling’s value so heavily over the past four weeks has finally concluded; until some new narrative hits the marketplace, there appears to be a stark rise in risk over opportunity for Australian Dollar buyers over the past few days.

At the moment most traders are worried that inflammatory language from the UK and Europe in the run up to the triggering of Article 50 may see similar drops in Sterling’s value to what was seen in October.

Conversely, anyone with an Australian Dollar to Sterling interest is in less of a rush from my perspective and should see more attractive levels in the coming weeks.

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 jjp@currencies.co.uk 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, therefore a short conversation could save you a significant sum on an upcoming transfer.

 

 

 

 

Is the Australian Dollar overvalued? (Daniel Johnson)

Australian Dollar strengthens following positive Chinese inflation data

The Australian economy is currently performing well, and last night the Australian Dollar was given a further boost by positive inflation data out of China. Inflation rose significantly from 0.2% in December to 1% in January. Australia is heavy reliant on China buying it’s exports and positive data from China will cause Australian Dollar strength. Australian business confidence is currently at new highs according to the recent National Bank of Australia’s Business Survey so the outlook is positive. Keep an eye on unemployment data through the early hours as if there is any significant deviation from expectations we could see volatility on GBP/AUD.

Brexit  Bill

The House of Commons have now passed the exit bill and it is now to be handed to the House of Lords. Personally I feel the bill will now be passed without too much resistance. However there are three key topics to be debated over 48hrs commencing on 20th February. The following amendments are a possibility.

  • A guarantee that three million EU citizens residing in the UK will have their rights protected post-Brexit.
  • Parliament must be updated frequently on trade negotiations. A minimum of once every three months.
  • A guarantee that Parliament will be given the chance to vote on Theresa May’s final exit deal.

Any amendments have the potential to push back the triggering of Article 50. Any delay will result in Sterling weakness.

Keep an eye on UK Inflation

UK inflation is being watched closely at present as many analysts are predicting sharp rises in 2017. With the pound so weak in value, imports are now proving more expensive.  Inflation data came in weaker than expected yesterday which is surprising and slightly worrying. I seems that the increase in prices is yet to filter through to the consumer. Let us hope that when it does, it is not a huge, sharp rise, as wages will not be able to increase at the same rapid rate and the UK economy will suffer.

Trade Negotiations – The key Market mover on GBP/AUD – Where is GBP/AUD headed?

Despite the positive data coming out of Australia. I still feel the Pound is chronically undervalued. GBP/AUD is only at current levels due to the uncertainty surrounding trade negotiations following Brexit. Once Article 50 is triggered and there is more certainty with regards to trade negotiations I expect Sterling to rally. I would expect it to be slow and steady, but I am confident in Sterling strength.

It is important to remember where GBP/AUD sat in September 2015, 2.20, we are now at 1.62. The UK’s economic backbone is a strong one and I feel the Pound will gain on the Aussie after Article 50 has been invoked.

If you are buying Australian Dollars short term, you are in a difficult position. I would strongly consider getting in touch with an experienced broker to assist in maximising your trade return. If you would like my help please do get in touch by contacting me at dcj@currencies.co.uk.

If you have a currency provider in place, let me know the details of your trade and I will happily provide a comparison. I am confident I will provide a substantial saving. Thank you for reading and I look forward to hearing from you.

Daniel Johnson – Foreign Currency Direct

Senior Trader

Australian Dollar strengthens against Sterling following Inflation data (Tom Holian)

The Australian Dollar has once again strengthened against the Pound owing to inflation data both in the UK and China.

Chinese inflation data published early this morning showed an improvement on the expectation and this helped the AUD as whatever happens in China often will impact the Australian Dollar so if the data is positive this often results in AUD strength vs Sterling.

Also out in the morning UK inflation was released which although was the highest in close to three years it was still lower than expected and this caused the Pound to fall against all major currencies.

UK unemployment data is due out tomorrow and I think we could see a brief rise in value for Sterling exchange rates as unemployment has been getting close to all time highs recently.

However, Australian unemployment data is released on Thursday and I think we could see any Sterling gains quickly eroded by the data causing GBPAUD rates to possibly fall in the direction of 1.60 so if you’re considering buying Australian Dollars it may be worth organizing this prior to Thursday’s announcement.

We end the week with UK Retail Sales on Friday and this is likely to cause further volatility but if lower than expected I think the Pound will continue to fall.

Overall the Pound is being weighed down by the uncertainty caused by Article 50 and until this is resolved I think we could see further losses for Sterling vs the Australian Dollar.

Having worked in the foreign exchange markets since 2003 for one of the UK’s leading currency brokers I am confident that not only can I save you money on exchange rates compared to using your own bank but also help you with the timing of your transfer of funds.

If you would like further information or for a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

Australian Dollar exchange rates hinge on unemployment figures due out on Thursday – Will we see Australian Dollar strength? (Daniel Wright)

Australian unemployment figures are due to come out on Thursday and expectations are that we may see the continuing trend of a fairly robust economy with the unemployment figure predicted to be at 5.8%.

Should this come out as expected or even slightly better then we may see the Australian Dollar make some further gains against most majors but any rise in unemployment may knock Australian Dollar exchange rates back a little.

The Australian economy has had a few knocks over the past few years but still seems to be hanging on in there, and earlier predictions of large Chinese problems appear to have been swept under the carpet for the time being.

I am still of the opinion that the Australian Dollar will have a period where it does have a tough time, however the issue is that as it stands it is seen as one of the best of a bad bunch, with interest rates still fairly favourable we may not see that change too imminently.

One larger factor that may be a trigger for a drop off could be further rate hikes in the U.S, should we see the interest rate in the States start to catch up the interest rate in Australia then you may see a large unwinding of carry trades, as investors would rather have their funds sat in USD than AUD due to its perceived safer nature.

Carry trading is where an investor borrows money in a low interest rate and shifts it to a currency with a higher interest rate, making a return on the difference.

If you are looking to buy or sell Australian Dollars against any major currency in the near future and you want to maximise your rate of exchange then it is well worth you getting in contact with us here personally. You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to contact you personally.

 

Will a high inflation reading tomorrow boost Sterling’s value? (Joseph Wright)

Sterling has gained almost 1% against the Aussie Dollar so far during today’s trading session, as hopes of a high inflation figure tomorrow have boosted hopes of an interest rate hike from the Bank of England later in the year.

At 9.30am tomorrow morning I believe that there could be some volatility between Sterling and other major currency pairs, as the inflation readings for January will be released.

Inflation figures out of the UK are being closely watched by foreign exchange markets as over the past year there have been some sharp falls in Sterling’s value which can push up the inflation rate. Also the UK is close to embarking on it’s formal separation from the EU after voting for a ‘Brexit’, so all eyes are monitoring the UK’s economic performance due to the uncertainty surrounding the UK economy moving forward.

The annual inflation figure tomorrow is expected to show a reading of 1.9% which is up from the previous figure of 1.6%. If the actual reading comes out substantially above 1.9% I expect to see a boost in Sterling’s value as the likelihood of an interest rate hike from the Bank of England (BoE) will increase.

The Pound’s value is mostly driven by sentiment at the moment but inflation figures are likely to impact it’s value due to interest rate change expectations, especially as the BoE hasn’t hiked the UK base rate in around 10 years now.

There are other events which could also impact the Pound to Aussie Dollar exchange rate moving forward, and if you wish to be kept up to date regarding these do feel free to get in touch for further information.

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 jxw@currencies.co.uk 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.

The future of GBPAUD exchange rates (Dayle Littlejohn)

For many of my Australian dollar clients the questions that is asked regularly is will rates climb again above 2 anytime soon. My response hasn’t changed for a while now, quite simply I believe its very unlikely.

This week the Reserve Bank of Australia kept interest rates on hold and the consensus is that the next shift would actually be a rise to combat inflation. The problem I have with this is that this would cause the Australian dollar to strengthen further causing exports to become more expensive. Nevertheless a cut looks unlikely anytime soon.

As for the pound, its becoming clear that the UK will start the process of leaving the EU at the end of March therefore further falls for the pound are expected. For Australian dollar buyers within the next 2 months I expect rates will continue to fall further therefore purchasing upfront may be wise.

As for economic data this week, the UK are set to realise their latest inflation numbers Tuesday morning. Inflation has been rising of late due to a cheaper pound and the bond purchasing program installed by the Bank of England. I feel inflation could rise further and therefore a rise in the pounds value could occur. For Australian dollar buyers this week, this could be a release you look to target.

If you are trading GBPAUD in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Where next for Australian Dollar exchange rates against Sterling (Tom Holian)

The Pound to the Australian Dollar has fallen during the course of the week after the Reserve Bank of Australia confirmed that they will be keeping interest rates on hold. This was compounded with the Statement released at the end of the week as it appears as if any interest rate change is off the agenda for the time being.

This has seen the Australian Dollar strengthen vs the Pound providing some good opportunities to take advantage of when converting Australian Dollars into Sterling.

The price of iron ore has been rising recently and this was reflected in the recent Commodity Index and this has also helped the Aussie Dollar.

Even though the investment in the mining industry has decreased over the last 5 years the value of commodities has been rising and Chinese demand continues.

The Pound is also being negatively affected by what is happening in the UK politically with the never ending saga of Brexit and the uncertainty of what may happen once Article 50 is triggered.

At the moment there is no clear path ahead and this is why Sterling has continued to suffer against the Australian Dollar and I think we could even see GBPAUD rates drop below 1.60 at some point this month.

My reasoning is that UK economic data has generally been quite strong highlighted by yesterday’s GDP figures.

Typically this would strengthen the Pound vs the Australian Dollar but with GBPAUD rates falling yesterday it seems clear that it is the political uncertainty that is causing Sterling’s demise.

Therefore, if you need to buy Australian Dollars it may be worth organising this soon as with Article 50 likely to be triggered next month this could cause all sorts of problems for Sterling.

If you don’t have the full availability of the funds you may wish to buy a forward contract which allows you to fix an exchange rate for a future date.

To find out more or for a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you. Please outline your particular requirement and the timescale involved and I’ll respond with my suggestions.

Tom Holian teh@currencies.co.uk