Tag Archives: aud exchange rates

Australian Growth data causes Investor Concern (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian Dollar has suffered of late due to several contributing factors. The most significant catalyst for the fall in Australian Dollar value is the US/China trade war. Australia is heavily reliant on China purchasing it’s goods and due to this any slow down in growth in China will have an impact on the Australian Dollar.

The Trump administration has placed significant tariffs on Chinese goods and China has retaliated with it’s own tariffs. The trade war is set to escalate and could be ongoing which does not bode well for the Aussie. Iron ore is Australia’s primary export to China and at present demand remains healthy which is good news for the Aussie, that is not to say this situation will last however.

Due to global economic uncertainty investors are choosing to shy away from riskier commodity based currencies such as AUD in favour of safe haven currencies such as the Swiss Franc and the US Dollar.

There are economic problems down under such as consumer spending and the cost of living in high wage growth areas such as Sydney and Melbourne. The Reserve Bank of Australia (RBA) took the decision to cut interest rates this month to 1.25% and there is the potential for further cuts.

The Australian economy is growing at its slowest rate in almost a decade, which has fuelled speculation surrounding how long Australia will sustain its run of over 27 years without a recession.

Despite the situation down under I believe the  problems in the UK outweigh that of those down under. We currently have no PM and are in complete Brexit limbo. If Boris gets in the probability of a no deal could increase as he will be using this scenario as a bargaining chip to get a better deal from Brussels. A no deal is the investors worst fear and has the potential to cause further woes for Sterling.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

US/China Trade Wars hurt the Australian Dollar (Daniel Johnson)

Australian Dollar hit by Trade Wars

In times of global economic uncertainty, commodity-based currencies such as the Australian Dollar usually struggle as investors seek safe haven investments for their money. Due to this the Australian Dollar has come under pressure lately due to the trade war between the US and China.

Australia has a heavy reliance on China purchasing it’s exports and as such any fall in Chinese growth has a knock on effect on the Aussie.  There has been steep fall  in Chinese trade activity for last month caused by the ongoing trade impasse with the United States.

Could there be further rate cuts from the RBA?

Another factor in the value of AUD has been the Reserve Bank of Australia’s (RBA) decision to cut interest rates to a record low of 1.25% earlier this year. This was an attempt to boost inflation towards the RBA’s target level of 2-3%. Based on comments from RBA members earlier this year there are predictions in the press that we could  see  more rate cuts later this year. This has the probability to weaken the Australian Dollar.

Those with an Australian Dollar requirement should keep an eye out for Australian employment data due out in the early hours of Thursday. Unemployment has risen in Australia of late, which was a contributing factor in the RBA’s recent rate cut, and if this is reflected yet again in May’s figures then the Aussie could lose value.

Comments from any RBA members following this data release could give an insight to monetary policy moving forward could therefore have an impact on the Australian Dollar.

Australia’s problems do not have the same weight as those of the UK’s, with no Prime Minister and Brexit in limbo, the Pound could be set for further losses, with the majority of candidates up for Tory leader ready to bring a ‘no deal’ back to the table. I expect Sterling to remain fragile for the foreseeable future.

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 minutes 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 18 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.

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.

Sterling starts the week strongly with GBP/AUD trading north of 1.86, will GBP/AUD test it’s annual highs again soon?

The Pound has begun the week on the front foot this morning, with GBP exchange rates generally up across the board of major currency pairs. GBP/AUD is up by over half a percent, with the pair now trading around the 1.8650 level which is around 2-cents from the best levels of the past year.

There could be further price changes this week, especially towards the end of the week as Australians will be going to the polls to vote on the Australian Federal election. There has been a lack on continued leadership down under as many of our readers that follow Australian politics will be aware of. Over the past 12-years there have been 6 different prime ministers and the current leader, Scott Morrison of the Liberal-National coalition is currently polled in 2nd place. Another change of leadership could cause weakness for the Aussie Dollar, as Morrison has only been in power since August of last year so another change could increase uncertainty for the Australian economy moving forward.

There will also be inflation data released out of Australia towards the end of the week, and a weak reading could put pressure on the Reserve Bank of Australia to cut interest rates at their next opportunity, so again this is another potential market mover.

The main influence on the Pound’s value is likely to be the cross party Brexit talks between the Conservative and Labour leaders. We’ve seen updates on the talks move GBP exchange rates in both directions recently, so it’s worth being aware of if you’re planning on making a GBP transfer soon.

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.

Australian Dollar boosted as RBA chooses not to hike interest rates just yet!

The currency markets were dealt a surprise in the early hours of this morning, as the Reserve Bank of Australia opted to hold interest rates at the current record low levels of 1.50%.

Over recent months inflation levels have stagnated, prompting a number of economists to predict another cut in interest rates which last week helped push the Pound to Australian Dollar up up to within 1-cent from the annual high, which is 1.8881. Despite keeping rates on hold the RBA did has kept the door open regarding rate hikes, and there will now large emphasis on employment figures along with inflation levels which could impact AUD exchange rates moving forward.

Retail sales is another area of the market that I expect to be followed closely, as retailers had their worst quarter in 7-years in the first quarter of this year.

Markets will continue to watch the Pound closely, and as we saw towards the end of last week the markets are sensitive towards Brexit related updates as this topic is the main driver for GBP exchange rates at the moment. On Friday GBP/EUR amongst other major pairs hit a 1-month high when the leader of the opposition, Jeremy Corbyn of Labour, stated that parliament must break the deadlock over Brexit and ‘get a deal done’ to exit the EU.

Talks have been ongoing behind the scenes regarding a deal, so moving forward I expect this matter to have an influence on the Pound’s value along with an speculation regarding PM May’s position.

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.

Australian dollar forecast : Will the Australian dollar rise or fall in May?

My view is that the Australian dollar could be on the back foot now as investors become more concerned about the RBA (Reserve Bank of Australia) cutting interest rates. The RBA will meet next Tuesday and there are some who think there is an increased chance of an interest rate cut, owing to some lower inflation numbers released in April. We also have the Australian election due on the 18th, the Australian dollar could therefore be in for a busy month.

The RBA has been in a holding pattern on interest rates for quite some time despite various changes in sentiment since 2016 when the RBA last cut rates. There has been continued speculation the RBA would need to cut again following increased concerns over the economic outlook in Australia, following the trade wars between the US and China.

With the trade wars concerns gently fading under the impression the two sides will strike an agreement, there has been less pressure on the Aussie dollar in recent weeks but the backdrop of such issues looks like it will continue to weigh on sentiment. Even if the US and China do pass a new deal, it is clear that global trade has changed forever under Trump, and the Aussie dollar as a currency so closely linked to global trade, will continue to be influenced by this news.

For me, May is more about the domestic issues facing Australia with low inflation prompting analysts to believe a cut is the way forward for the RBA. Whilst I am not overly confident the RBA will cut, I expect they will comment that they may well do in June, which I believe will weaken the Australian dollar.

The election on the 18th May is also a reason for concern in May, with the Labour party looking to perform well which could well have a negative outcome for the Australian dollar, since they have numerous plans to spend more. The election is likely to be a very topical even over the next 2 weeks and may well sway the Aussie dollar, increased volatility should be expected.

May looks set to be a very busy time for the Australian dollar so if you have any transactions that you are considering, please do not hesitate to contact me to discuss the latest news and forecasts, which will influence the value of your transfer. I work as a currency broker and can offer guidance as to some of the best strategies to consider when making an Australian dollar currency transfer.

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

Jonathan Watson

Will the Australian dollar weaken this week? RBA Meeting Minutes are key

Tomorrow is the latest RBA, Reserve Bank of Australia meeting minutes. Investors are closely monitoring this for any news that we could well see key changes in the outlook for the Australian dollar, as the RBA responds to the change in economic outlook for both the global economy and the domestic Australian economy.

Pressures are mounting on the RBA to be more conscious of a consideration for a more dovish, or soft interest rate policy as investors seek to gauge the likelihood that up ahead interest rate cuts will become much more necessary for the Australian economy. China is Australia’s largest trading partner and the market is of the belief continued economic troubles will see the Australian economy suffer, and therefore need to cut rates ahead.

The raising and lowering of interest rates is a big factor in the currency markets, as investors seek to position themselves in a currency which they believe will ‘yield’ a higher return. For example, the higher an interest rate, the stronger generally a currency will be. It is similar to the way that a higher interest rate will attract investment into a savings account.

Likewise, when an interest rate is cut, or investors believe that it might be up ahead, the currency will lose value. This is because it makes the currency less attractive to hold by those concerned with a stronger investment. Such is the case with the Australian dollar at present, as a lower interest rate prediction makes the currency less attractive to hold by investors.

Moving forward, the RBA and Australian economic data will face tough scrutiny as the market gauges the likelihood of the future cuts in the rate. Clients with a position to buy or sell Australian dollars might benefit from a quick review with our team to ensure they are fully up to date with what lies ahead, and how they might benefit from the volatility.

Thank you for reading and please get in touch if there is anything that you wish for us to run through or discuss, relating to a transfer of Australian dollars.

Jonathan Watson

jmw@currencies.co.uk

GBP/AUD – Where Next? (Daniel Johnson)

Brexit Extension

Since December the Pound has been losing value against the Australian Dollar. Sterling reached its highest level against the Aussie yesterday since the 2016 referendum. This was following the news that a Brexit no deal had been taken off the table until 29th March combined with the news that MPs have now voted to extend Article 50 in order to come up with a mutually acceptable deal between the UK and the EU.

The Australian economy is currently experiencing problems which is proving to be another catalyst for the rise in GBP/AUD. Consumer confidence, business confidence and housing loans data all showed a decline. Australia’s heavy reliance on China purchasing it’s goods and services is hurting the Aussie as Chinese growth, although still impressive has slowed quite considerably since the US/China trade war commenced. It was announced yesterday that China’s industrial output fell to its lowest level in 17 years during the first two months of 2019, unemployment has also been on the rise. There is the potential that Chinese President, Xi JinPing and US President, Donald Trump could come to an agreement at the end of the month and cease tariffs which could boost investor confidence and in turn strengthen AUD.

Will the RBA minutes give an insight into future Monetary Policy?

Although Brexit will continue to be the key driver on GBP/AUD there are plenty of other factors that can have an impact on the currency pair. On Tuesday morning, during the early hours the Reserve Bank of Australia (RBA) will release minutes following the recent interest rate decision where rates were kept on hold at 1.5%. The RBA have already hinted at potential rate cuts and if this is mentioned again we can expect further Australian Dollar weakness.

Next Thursday has the potential to cause market movement with the release of RBA Bulletin and unemployment figures for February. If the data arrives away from expectation expect volatility.

Personally, I think the Aussie could be in for a tough time due to the increasing problems surrounding the economy, I haven’t even touch on the housing price bubble. If it is announced there is a deal on the Irish Border I would expect significant Sterling strength. I feel Pound is currently chronically undervalued. If I was sitting on Aussies I would not be hanging around for improvements considering risk versus reward.

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 .

 

 

 

 

 

RBA expected to keep rates on hold, but could GBP/AUD see further gains this week?

Over the past week we’ve seen the GBP/AUD rate hit the headlines after the rate hit an almost 3-year high. With Brexit now just a few weeks away the Pound has defied many expectations and strengthened across the board of major currency pairs with GBP/AUD hitting 1.8732 at its highest point. At the time of writing the pair remain north of 1.87 on another strong start for the Pound so I wouldn’t be surprised to see the current 52-week high of 1.8732 tested again, if not today perhaps later this week.

Sterling has been climbing since the path for Brexit became clearer, and a number of MP’s have suggested they could support the Prime Ministers Brexit deal when the next vote takes place. The next meaningful vote will take place on the 12th of this month and after Theresa May lost the last key vote on this matter by a record margin I expect all eyes to be watching the Pound and the outcome of the vote on the 12th.

This evening UK time the Reserve Bank of Australia (RBA) will announce their next interest rate decision. No changes are expected from the record low of 1.5% but the comments afterwards from the RBA could impact AUD exchange rates so it’s worth being aware of this release as the last time the RBA made some dovish comments and indicated that there could be further cuts we saw the Aussie Dollar sold off.

I expect political updates from the UK especially regarding Brexit to remain the main drivers of currency fluctuations owing to the Brexit being just a few weeks away now.

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.

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.