Australian dollar forecast; Will the RBA cut rates again?

The Reserve Bank of Australia cut their base interest rate recently which has seen the Australian dollar weaker in recent weeks. Interestingly, the currency itself did not weaken massively on the news of the cut to historical lows last week, partly because the market was expecting it. It appears to me that the future, we might well in find the RBA forced to cut rates again.

My overall belief is that the factors which contributed to a weaker Aussie dollar in 2019 will by and large remain. A key factor in all of this is of course the trade wars with Donald Trump putting pressure on the global economy, in particular the Chinese economy which is a major customer for Australian exports.

The resulting slowdown globally is only going to continue in my opinion, this will surely keep pressure on the RBA and perhaps force their hand again down the line. It is probably worth pointing out that the Australian economy has been through one of the longest periods of economic growth in history in the Western world. Economic history suggests that at some point that growth will struggle with tougher economic times and the current trajectory and stagnation seems tricky to just shake off with just one interest rate cut.

There is important economic news for Australia this week with the release of the latest news from the Australian Bureau of Statistics, releasing more detailed information on Australian Unemployment data. This has been a key component of decisions on interest rates, as the RBA grapples with falling Unemployment and also falling Inflation.

The future looks far from straightforward for the Australian dollar, clients with a position to buy or sell Australian dollars might benefit from a quick review with our team, to get the latest news and information on their options and the best strategy to maximise any transfers.

Will more disappointing data for the UK today result in further falls for the Pound?

It’s been a disappointing week for UK economic data releases so far, which has come at a bad time for the Pound as the currency is already trading at the lower end of it’s recent trading ranges. The Pound to Aussie Dollar pair in particular is trading in the early 1.80’s, and at the time of writing it’s trading at 1.8150 which is towards the lower levels of the day.

1.80 could act as a support level for the Pound, but those of our clients and readers monitoring the pair should be weary of potential further falls for the Pound as not only is the currency under pressure owing to political uncertainty, but economic data is now starting to disappoint which could cause further falls.

So far this week both manufacturing and construction data has shown a slowdown from the previous figures. At 9.30am this morning there will be the release of Services PMI which is arguably more important as the services sector covers around 80% of the UK economy. I think a drop in these figures could result in a sharper sell-off than we’ve seen this week due to the importance of the sector to the UK economy.

Data aside, the leadership contest for the Conservative Party could be the next potential market mover, as the victor’s attitude to Brexit is likely to impact markets. Down under we have seen the Australian economy pick up slightly but there are still expectations of further interest rate cuts later this year after the recent cut, so this is a potential downside for the Aussie Dollar moving forward.

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 Australian Dollar Forecast – UK politics and Australian interest rates

The Pound fell by 5 cents against the Australian Dollar during last month after what has been a very uncertain time politically in the UK.

Prime Minister Theresa May has announced her resignation and we are now in the midst of a leadership election within the Tory party.

The likelihood is that the battle for the next Prime Minister will continue until late July, which means more political uncertainty and this could cause ongoing problems for Sterling exchange rates.

The other problem for the Pound is that the next Prime Minister will likely be more of a Brexiteer and this could increase the risks of a no-deal Brexit.

Personally speaking I don’t think a no-deal Brexit will happen which means that we’re likely to have to extend the October deadline, have a second referendum or even potentially have another general election. All of these options care likely to cause problems for the Pound.

However, in the very near future the Reserve Bank of Australia will be announcing their latest monetary policy overnight. The strong likelihood is that we’ll see the central bank cut interest rates to their lowest level on record of just 1.25%.

If after the interest rate cut they announce that there could be further rate cuts coming then I think this could see GBPAUD exchange rates move in an upwards direction which is good news for anyone looking to buy Australian Dollars at the moment.

The Australian economy has been showing signs of problems recently with employment, economic growth and inflation so I think the RBA will signal that there are further rate cuts to be made but depending on the timelines offered this could cause a lot of movement on GBPAUD exchange rates overnight.

Therefore, if you’re in the process of looking to convert Australian Dollars then pay close attention to the decision made as well as the RBA’s accompanying statement.

I have personally worked for one of the UK’s leading currency brokers for 16 years and I’m confident of being able to save you money on exchange rates compared to using your own bank. If you would like a free quote then send me an email with an outline of your particular requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Will the RBA cut interest rates and the impact on the Pound vs the Australian Dollar?

The Pound has really been struggling against the Australian Dollar in recent weeks owing to the ongoing political uncertainty in the UK.

The Pound is now trading at its lowest level against the Australian Dollar in a few weeks and I think we could see further losses ahead for Sterling exchange rates.

Next week the Reserve Bank of Australia will once again meet to decide the future of monetary policy down under.

With the Australian economy coming under more and more pressure recently there is a strong likelihood that we’ll see a cut in interest rates on Tuesday morning.

As this is widely anticipated it may not have the impact on exchange rates that you may think so if you’re banking on a big movement for GBPAUD exchange rates it may not happen.

The main thing to look out for will be the statement from the RBA as if they hint that there are more interest rate cuts planned for the future then this could weaken the Australian Dollar so make sure you pay close attention to the announcement.

Indeed, some analysts think that the RBA should cut interest rates by 0.5% but I think that would be too aggressive for the time being.

We also have the release of Australian retail sales due out on Tuesday morning. Retail sales are a good indicator as to the health of an economy so any further signs of a slowdown will provide the RBA with further justification to cut interest rates.

Then on Wednesday we have another big data release for Australia with the latest GDP data for the first quarter. The expectations are for growth of 2.5% which would be an improvement from the previous quarter of 2.3% for year on year so we could see some volatility for GBPAUD exchange rates during the middle part of next week.

If you have a currency transfer to make and would like to save money when buying Australian Dollars then contact me directly for a free quote and I look forward to hearing from you. I have worked for one of the UK’s leading currency brokers since 2003 and I’m confident that I can also help you with the timing of the trade.

Tom Holian 

teh@currencies.co.uk

 

Pound hits its lowest level in a month against the Aussie Dollar, despite Aussie woes

Due to Australian Dollar weakness, for reasons we will touch on shortly the GBP/AUD rate hasn’t been in the headlines recently which is in contrast to GBP/EUR and GBP/USD rates for example.

The Pound has been losing value over the past few weeks as cross party talks regarding the Brexit deal and UK Prime Minister May has announced her departure date regarding her term as Prime Minister. Uncertainty over the future of the UK’s trading relationships has now increased as the new leader of the Conservative Party is yet to be announced, as the route to Brexit has now become less clear.

If the new Conservative leader is open to leaving the EU this year without a deal in place, I think we could even see the Pound fall further, we have already seen the Pound lose almost 4% in less than a month the the GBP to EUR rate fell a record 13 days in a row.

The drop for the Pound against the Aussie Dollar has been less dramatic than the drop against other major currency pairs, and this is due to Aussie Dollar weakness which has stemmed from concerns surrounding the Chinese economy due to the trade war talks between the US and China. Should the situation between the US and China improve I think we could see the Pound lose even more value against the Aussie Dollar.

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.

May’s future in doubt (Daniel Johnson)

Pound to Australian Dollar Forecast

Sterling has suffered of late due to the current situation on Brexit, Brexit being one of the key drivers on GBP/AUD. We recently saw a spike up to 1.88 following what was deemed to be positive news on Brexit. May’s talks with Corbyn over a deal that could be mutually acceptable from both Labour and the Conservatives caused the Spike. I believed the gains for Sterling would be short lived as I had little faith the talks between May and Corbyn would result in a deal that would pass through the House of Commons. This proved to be true.

I believe Sterling could be in for further losses as if Farage’s becomes the UK’s representative in the bloc, it would show a huge power shift away for m the usual top contenders, creating further political uncertainty. Many believe if he does prove to be  successful this could be the final nail in the coffin for May and she will be forced to step down, she has proved extremely resilient up to this point however.

May made a speech yesterday and she stated the House of Commons vote on her deal may now be delayed from the first week of June. This was not taken well and has seen her unpopularity grow. The thoughts in many of the voters minds is no doubt that if her deal fails to be passed she will resign.

I think the vote is destined to fail when it takes place, this may be already factored into GBP/AUD to some extent as the market moves on rumour as well as fact, but I think this could also cause the Pound to lose value. The usual market reaction if a leader of a Country steps down or is ousted is that the currency in question would weaken, however in this situation we could see the opposite as anew Tory party leader may be deemed to have a better a chance of sorting out this Brexit mess.

The Aussie has had it’s own trouble, Australia has a heavy reliance on China purchasing it’s goods and services and any decline in Chinese growth will impact the Australian economy and in turn the Australian Dollar. The escalation in the US/China trade war is causing investors to move away from riskier commodity based currencies such as AUD for safe haven investments.

There is also the probability of an interest rate cut from the Reserve Bank of Australia next month, so despite the potential for further Sterling gains it may be wise to move before the decision if you are selling the Aussie.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

 

 

 

Pound vs Australian Dollar rates improve after Theresa May’s speech

The Pound hit 1.86 against the Australian Dollar yesterday afternoon after what has been a very busy week so far for GBPAUD exchange rates.

The election over the weekend was won by the current Prime Minister Scott Morrison who will remain in power for a full term.

He originally replaced the previous leader back in August so a new full term has helped to settle the Australian economy.

This is turn helped to strengthen the Australian Dollar against the Pound over the weekend but since then the Pound has fought back following Theresa May’s speech on Tuesday afternoon.

Theresa May has warned MPs that they have ‘one last chance’ to deliver Brexit and she is anxious to get this new deal backed in the House of Commons in early June.

However, although some amendments have been made I cannot see this deal getting accepted which will trigger her in to announcing her resignation timeline.

Theresa May has also suggested that it may even mean that Brexit could even be cancelled. The Prime Minister also hinted that a second referendum may be held if there is enough appetite in parliament for it to take place.

All this news has helped the Pound to recover against a number of different currencies and good news for anyone looking to exchange Pounds into Australian Dollars.

However, later this week we also have the European elections due and this could cause some uncertainty for the Pound so if you need to buy Australian Dollars it may be worth taking advantage of this current spike.

If you would like to save money when transferring Australian Dollars compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you. I have worked in the foreign exchange industry for one of the UK’s leading currency brokers and I’m confident about saving you money as well as helping you with the timing of the trade.

Tom Holian teh@currencies.co.uk

Shock Election Win for Australian Coalition Party & Breakdown in Cross-Party Brexit Talks Dominate the Headlines (Matthew Vassallo)

GBP has found some welcome support against the AUD over the past 24 hours, helping to curb any further losses after last week’s downturn.

Investors sold off their GBP positions in haste following a breakdown in cross-party Brexit talks. With both the Conservatives and Labour laying the blame for the breakdown at each other’s feet, investors’ confidence in the UK governments ability to achieve Brexit via a smooth transition, has quickly evaporated.

This negative feeling transpired and caused Sterling to lose over three cents in value against its Australian counterpart, with the Pound falling below 1.84 towards the end of last week.

Whilst the current outlook regarding the UK’s Brexit is still cloaked in uncertainty, the Pound has at least found a level of support during the early party of the trading week. GBP moved back above 1.85 overnight at its high but fell again as the results of the Australian election were finalised.

The very unexpected result was confirmed, and the expected Labour did not materialise. This went against the vast majority of the opinion polls, which for almost two years prior to the general elections, put the Labour party ahead of the more conservative Coalition, led by the now Prime Minister Scott Morrison.

How the new government’s policies will affect the Australian economy will be realised over time but for now the markets have taken a cautious approach to the new regime and with the Brexit undertone likely to continue to drive market sentiment and much of Sterling’s value, it may be the at the Pound struggles to make any sustainable inroads back towards and over 1.90 against the AUD in the short-term.

If you have an upcoming AUD currency transfer 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 nineteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award winning 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.

AUD to GBP Strength after Australian Election (James Lovick)

The pound to Australian dollar exchange rate has fallen lower following the Australian election result which has helped boost the Aussie dollar. Prime Minister Scott Morrison has been re-elected despite being behind in the polls in the campaign. This campaign was won on economic management, tax cuts and the pledge to return to a budget surplus.

There is a good short term opportunity for those looking to sell Australian dollars for pounds with rates for AUD GBP having moved to 1.84 for the pair. Whether the Australian dollar will continue to strengthen remains to be seen. The Reserve Bank of Australia is potentially looking to cut interest rates in the months ahead and this could see Australian dollar weakness. This will be the first time the central bank will have changed rates since 2016 and could see a big movement in the Australian dollar.

UK Politics are also about to create volatility for GBP vs AUD with the European elections to be held this Friday. There is a growing expectation that the two major political parties will be punished at these elections like never seen before and could help redirect the debate on Brexit. A big shift to the newly formed Brexit Party under Nigel Farage will likely reinforce the Leave vote and put pressure on politicians to deliver on Brexit and potentially with a cleaner break.

A drop in the price of sterling may be seen if the electorate vote for the Brexit Party in large numbers. Following this the fourth and final meaningful vote on the current withdrawal agreement will be held week commencing 3rd June. If the Prime Minister is unable to push through her Brexit deal in the House of Commons then the options on Brexit are either no deal or revoke Article 50 altogether. Either of these outcome would likely see a major volatility for sterling exchange rates and the GBP to AUD pair.

The Australian dollar may be influenced by a speech from US Fed Chair Jerome Powell on Tuesday. The US Fed have changed tact on the rate cycle having paused on any further rate hikes. The Fed has indicated that it would like to start to keep the markets guessing as the Fed has done historically and so any sudden shift could impact both the US and Australian dollars. Changes in the US have direct knock on effect on the Aussie dollar as the divergence between the two economies is calculated by investors.

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

Australian election to set the tone for Pound vs Australian Dollar rates

Australian Election this weekend

We are now just days away from the next Australian election due to be held this weekend.  According to a number of polls the voting is very close but current Prime Minister Scott Morrison appears to be the preferred person to continue to lead the country.

There have been a number of elections during the last ten years and this has often caused the Australian Dollar to suffer as a result owing to the uncertainty during an election campaign.

At the moment the voting appears to be very close with hours to go before the polling stations close.

Scott Morrison is the current Prime Minister and if he stays he will have a long term in power owing to a recent change in legislation.

However, at the time of writing Nine’s exit poll has predicted that Bill Shorten will win with a a 2.4% swing towards the Labor party.

If Labor do win then this could have a big impact on the Australian economy.

In previous weeks a number of leading businessmen have spoken out against a Labor government as they believe this could lead to negatively impact upon the Australian economy.

With 150 seats up for grabs in the House of Representatives and 40 of the 76 seats in the Australian Senate expect to see a lot of volatility for the Pound vs the Australian Dollar over the next few days.

Therefore, it will be very important to see who wins over the next day as this could have a big impact on the value for the Pound vs the Australian Dollar. Therefore, if you’re in the process of making a currency transfer involving Australian Dollars then pay close attention to this weekend’s election news.

If you have a currency transfer to make and would like to save money on exchange rates then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk