Tag Archives: AUD forecast

Australian dollar mildy firmer after RBA Meeting!

The Australian dollar has been mildy firmer after the RBA, Reserve Bank of Australia, kept their interest rates on hold overnight. The expectations for the RBA is to have moved their outlook to a slightly more dovish tone but overall they kept up their current viewpoint, which is essentially that they will keep interest rates on hold for now.

The RBA did cite increased global risks, which could lead to a lower economic outlook in the future. This might well prove indicative for future Australian dollar weakness, there is now increased expectations that the longer term future for the Australian currency remains subdued. However, for now, as the RBA are not directly forecasting a rate cut, the market is likely to err on the side of caution.

In other news overnight the latest Australian Retail Sales figures weighed slightly on the market, coming in slightly worse than expected. This could be another sign of what the future might hold and be an indicator that the Australian dollar might in the future be struggling.

Some of the downside risks for the currency include global events such as the Trade Wars with China, and also recession in Italy. With the IMF recently having downgraded global growth, we could see the Australian currency lose value longer term if global confidence does not improve.

I expect the Australian dollar to weaken longer term and think clients looking to sell the currency would be better to move sooner than later, to avoid the risk of any losses. The Australian currency is effectively a barometer of sentiments on global trade and with those sentiments likely to suffer further, it seems likely the currency will fall in the future.

Next week is a series of Australian releases, including Home Loans and also some Chinese data. With Chinese economic news weighing on the economic outlook for the region, clients with Australian dollars to sell might wish to take advantage of the more recent improvements and lock in their gains.

Thank you for reading and please let me know if you have a transfer that we might be able to help out with, or you wish to discuss.

Jonathan Watson

jmw@currencies.co.uk

 

Australian dollar at the mercy of global news!

The China – US Trade Wars have been a major factor driving the currency markets in the last 6-9 months, impacting the Australian dollar and the economy. Australian economic data has been mixed but with Chinese data reflecting a slowdown, particularly in Manufacturing, the Australian dollar has been softer.

Looking ahead there is lots of important news in the currency markets this week to move the Australian dollar, this includes information at home and abroad. Domestically we have the latest Australian CPI, Consumer Price Inflation, data to move the market. The Australian economy has been mixed and investors are still debating the prospect of interest rate hikes in the future.

Tomorrow is also important with the latest US Federal Reserve interest rate decision, which could be a market mover on the US dollar and thereby impact the Australian dollar. USDAUD is the most heavily traded pairing for the Aussie and any large movement on the USD can ‘weigh’ the Australian dollar down against other currencies.

Later this week we have the latest US-China trade war talks which could be a market mover in the future, clients with any AUD transfers should be keeping a very close eye on the latest news. The meeting this week might yield too much news since there is still a 1st March deadline for the talks to be finalised.

Finally, Friday is the latest US Non-Farm payroll data which might well trigger volatility on the Australian dollar, by altering global attitudes to risk and viewpoints on global trade. Clients looking to buy or sell the AUD should be very conscious of these developments which should see a very busy end to the week for the Australian dollar.

If you have a position buying or selling and wish to get a fresh update o the market and all the important issues driving your levels, please do get in touch to discuss the latest news with me Jonathan Watson.

Thank you for reading and I look forward to hearing from you.

Jonathan Watson

jmw@currencies.co.uk

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.

Sterling climbs as May’s Brexit deal is emphatically rejected

It’s been a volatile 24-hours for the GBP/AUD exchange rate, as the Brexit talks ramp up and the UK parliament decides how best in carry out the Brexit.

Late yesterday evening the UK Prime Minister, Theresa May’s Brexit deal was overwhelmingly voted against by Parliament. The amount of votes she lost by was in the top-end of expectations, as she lost by 230 votes with was a much larger number than many analysts had expected.

Since then, the leader of the opposition (Jeremy Corbyn of Labour) has called a ‘vote of no-confidence’ in the government which will take place this evening. May is expected to win as no members of her own government have announced that they will vote against her and the DUP Party of Northern Ireland has also offered their support.

Tonight’s vote at 7pm is the next step in the Brexit process that could impact the Pound’s value, but what happens next is now quite unclear. The existing government has 3-days to announce their plan-b which could also be a market mover, so if you wish to be updated in the event of a major market movement do feel free to register your interest.

The Aussie Dollar, like the stock markets in the region remain under pressure whilst we wait for more clarity on global growth and trade war concerns between China and the US. The GBP has regained a lot of ground against AUD recently and last nights vote has helped. The pair are currently trading in the 1.79’s so it will be interesting to see whether the pair will manage to break through the psychological 1.80 level.

Moving forward I expect to see the pair continue to be driven by Brexit related updates, although early tomorrow morning there will be a number of releases from Australia concerning new home sales and inflation data.

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 – Australian dollar weakness ahead?

The Australian dollar has weakened overnight as investor focus shifts towards the now wider split between the US and Australian interest rate. With Australian interest rates at 1.75%, but the US now at 2.5%, the US dollar is a more attractive currency to hold and it has gained ground against the Australian dollar, weakening the Aussie in the process. The US raised interest rates overnight and are expected to raise further in 2019, despite many views to the contrary. This could see more pressure on the Australian dollar in 2019.

The economic news out of Australia overnight too was fairly positive with the Employment rate and the employment change, month on month both posting gains. This shows the Australian labour market is performing well and if such news continues in 2019, could be more supportive for an interest rate hike down under, which has so far been so elusive. The Australian dollar is likely to endure a mixed bag as we enter 2019 with the market closely following the latest news on US and Australian interest rates.

Global trade has been another factor driving the Australian dollar as the market ponders the possible negative effects from Donald Trump’s Trade Wars with China. With Australian trade relations with China forming a major part of the Australian economy, the market has been closely monitoring the sentiments on the Trade Wars, plus the possible negative fallout from any economic woes. The fact the Australian currency acts as a barometer of global trade and risk sentiment, owing to its economies close relationship to traded commodities like Coal, Steel and Aluminium, makes it all the more sensitive to such news.

Confidence is still holding in global markets but it does seem many are looking into the future with less reasons to be optimistic. This could ultimately spell trouble for the Australian dollar in 2019, particularly if the Trade Wars deteriorate further and the US presses ahead with their economic plans.

If you are looking to buy or sell Australian dollars then please do get in touch to discuss the latest news and forecasts. With the currency so sensitive to global news and developments it is important to understand all of the latest news and events to move the rates.

Thank you for reading and please contact me Jonathan Watson to discuss further.

Jonathan Watson

jmw@currencies.co.uk

 

Australian Dollar Forecast : Will the Australian dollar weaken in 2019?

2019 is looking like it could be a very testing year for the Australian dollar, with a number of possible outcomes on the currency. By and large, it is likely it will be overseas events which act as the bigget driver on the currency with the Trade wars between the US and the China looking a key factor to drive the currency. With 30% of Australian exports going to China, the economic outlook on China and global trade in general, is vital to determining how the Australian dollar will behave.

Throughout 2018 the market has been see-sawing on the prospect of the trade disputes deteriorating or improving. The overall expectation in 2019 is the trade tensions will only deepen as both the US and China dig their heels in, seeking to save face and ultimately harming their economies in the process. Donald Trump is looking like he will only continue to put pressure on China and the Chinese are unlikely to back down.

The recent extension of the 10% tariffs further into 2019 was seen as welcome, although the looming prospect of 25% tariffs on $200 bn worth of goods should be cause for concern. The market is eagerly awaiting the next steps and future direction of the trade disputes. Even with these short term ‘lulls’ in sentiment, the overall negative effects from this issue should be a thorn in the side of the Australian dollar in 2019.

The RBA, Reserve Bank of Australia, have been very aware of the trade concerns and this may well weigh on their decision making process in the coming year. The likelihood is that the RBA will not raise interest rates next year, as they have to allow the Australian economy the space it needs to continue growing, amidst the uncertainty of a slower Chinese economy.

There is even speculation the RBA might need to consider an interest rate cut, should the Australian economy really struggle. Clients holding Australian dollars to sell, might wish to take stock of the favourable levels on offer compared to how weak the currency might get next year.

Thank you for reading and please speak to me Jonathan Watson to learn more regarding the currency and the best strategy to maximise value.

jmw@currencies.co.uk

 

Brexit chaos continues as Conservative MP’s trigger a vote of no confidence in PM May, will this put pressure on GBP/AUD?

This morning it’s been announced that a vote of no-confidence has been triggered by the Conservative Party after Sir Graham Brady, the Chairman of the 1922 Committee confirmed that he has received at least 48 letters of no-confidence from Conservative MP’s.

The Chairman of the 1922 Committee isn’t required to announce how many letters he’s received but we do know that it’s at least 48 as this number constitutes 15% of the Tory members. Since the news broke the Pound has actually remained unchanged and this is probably because the vote will take place this evening between 6.00 pm and 8.00 pm so until shortly afterwards we won’t know the outcome and therefore, the next steps for Brexit.

Since the announcement which was around 7.45 am this morning, there have been a number of Conservative MP’s that have outlined their plans to support May, with the general consensus that a change in leadership this far into the Brexit process would be chaotic. If there are a number of votes against against her though, there is a chance she may resign even if she’s not obliged to owing to the lack of support from her own political party.

May has already given a speech outside Downing Street this morning whereby she’s highlighted that if she’s replaced a new leader would have to delay Brexit, as they wouldn’t have enough time to renegotiate the withdrawal agreement.

With regards to the Pound to Aussie Dollar exchange rate I would expect to see the next potential market movement to come after the vote this evening, with the result expected to be released shortly after the vote.

AUD exchange rates have been influenced over the past week and a half by the concerns that the US-China trade war tensions could resurface, as China is Australia’s main trading partner. Those of our readers planning a GBP/AUD trade should follow this matter as it’s the main driver of AUD value at the moment.

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/AUD drops after May’s Brexit deal looks unlikely to get the support she needs

The Pound is down across the board of major currency pairs today, in most cases by over 1% at least with the GBP/AUD rate down by over 1.6% at the time of writing. Yesterday the Pound was increasing in value on hopes of May’s cabinet supporting her deal, but this morning the situation is very different with Sterling under increasing pressure.

This morning its emerged that Dominic Raab, the Brexit secretary that took over from David Davis after he resigned, has this morning resigned himself stating that he ‘cannot in good conscience support the terms proposed for our deal with the EU’. This has put further pressure on Sterling with money markets now suggesting the chances of another interest rate hike from the Bank of England has now lowered.

Whether the Aussie Dollar will continue to climb against the Pound this morning will depend on whether there are further resignations from her cabinet, and also whether May can pass her Brexit deal through Parliament. The rumour mill suggests she will need to gain the support of of more than 50 hardcore Tory Brexiteers and Labour rebels. Donald Tusk has also hinted at concerns May could lose her position which would scupper the plans agreed over the past week.

Some key figures from within the hardcore Brexit movement have already announced their disapproval, and I think there could be further resignations based of the knee jerk reaction to her proposals.

Economic data is likely to take a back seat regarding GBP exchange rates at the moment, with Brexit remaining the main driver of currency value. If you wish to be updated in the event of a major market movement do feel free to register your interest.

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 Statement boosts the AUD: Where next for the Australian dollar?

The Aussie rises…

The Australian dollar is stronger overnight following an upbeat assessment from the RBA Monetary Policy Statement. The Reserve Bank of Australia is loosely looking to raise interest rates in the future which would help the AUD to rise. It has risen overnight following the commentary that saw them raise their Inflation and Growth forecasts.

Another factor to drive the Australian dollar is the outlook on the Trade Wars which have seen the Australian dollar rising according to the viewpoint on how it will influence the Chinese economy. Recent rising expectations that the Trade Wars would gently resolve themselves have cooled but the initial fears that saw the Aussie massively sold off, have subsided.

Global Issues remain

I expect the Trade Wars will continue to provide concern, it seems more likely than not that Donald Trump will trigger some kind of concern on global financial markets which would weaken the Australian dollar. If not owing to economic concerns abroad, it might be political concerns domestically in the US which drive the Aussie.

The recent mid-term elections saw the US dollar lose ground against most currencies with the Australian dollar a beneficiary of the uncertainty. The Aussie did rise on this news, as investors sought to diversify their currency exposure away from the US and possible political issues ahead.

As you can see, there are numerous global factors which drive the Australian. Trying to accurately predict what the rates will be will involve accurately predicting not only what Donald Trump might do, but also how the market might react to it. Some might suggest Donald Trump does not know exactly what he will do next, trying to predict him will be no easy feat!

What lies ahead for GBPAUD rates?

GBPAUD levels have fallen below 1.80 on the news, could the RBA be preparing to raise interest rates? Westpac do not think so, with them believing the RBA will hold through 2019 and 2020. There is even a view that the RBA may cut rates, by some who feel Australia’s booming housing market and highly indebted consumers cannot stand a hike.

Whilst the pound has been notably buoyant across most currencies, rising to some of the best rates all year or certainly multi-week or month highs, the pound to Australian dollar rate has not performed so well. Whilst we are tracking improved levels, we are still down owing to the Australian dollar also performing well.

GBPAUD exchange rates hit a peak of 1.8713 in October of this year, significantly above the 1.5909 lows of Brexit in October 2016 following the EU Referendum. Current rates of 1.79-1.80 are therefore below the peak but above the average.

Mix into this the uncertainty on Brexit (who can accurately predict the outcome there either?) and we have a plethora of events to move GBPAUD rates. My general expectation is that the pound will rise further against a weaker AUD if the global concerns continue on Trade Wars. I think the threat of a ‘new world order’ of more protectionism will see the Australian dollar weaker in the future, particularly as that uncertainty will keep the RBA on hold or possibly looking to cut.

Will you need to make a transfer?

For clients with a position selling Australian dollars for pounds, I feel gearing up to capitalise on the recent spike is sensible. Clients buying AUD with sterling might wish to take a slightly more speculative view but in hoping for further improvements, they could easily get caught out relying on a smooth Brexit process.

If you have a position to buy or sell AUD for sterling I would be most interested to share some of the latest news and events driving this pair. There is no easy answer to the question of ‘when is the best time buy or sell Australian dollars?’, but by careful analysis and utilising our experience in tracking trends, we do strive to offer an informed opinion to help you make the most of your currency needs.

Thank you for reading and please contact me to discuss further.

Jonathan Watson

jmw@currencies.co.uk

 

Retail Sales down under disappoint but AUD remains resilient, where to next for the GBP/AUD pair?

Despite some disappointing data being released in the early hours of this morning, the Aussie Dollar has remained resilient against the Pound even though its dropped off of it’s 1-month high against the US Dollar.

Retail Sales rose just 0.2% through September which was below expectations, and now there are concerns that 3rd quarter economic growth could disappoint. The GDP figure for the 3rd quarter will be released in early December so I expect economic data releases covering the Australian economies health to be followed closely. Despite the softening against the US Dollar as a result of this morning’s early release the AUD/USD rate has still strengthened by over 1.5% throughout this week.

The Aussie Dollar has also gained value vs the Pound this week although not quite to the same extent as AUD/USD. Moving forward the pair are most likely to be driven more by the Pound’s value and how its impacted by the Brexit developments. Sterling has strengthened against a raft of currencies over the past few days after a number of positive updates have been released. On Wednesday the Brexit Secretary, Dominic Raab suggested that the deal could be in place by November the 21st, which saw a spike in GBP exchange rates as hopes of the deal being wrapped up during this month had waned after talks stalled during October.

Then on Thursday morning news broke that there is a deal in principle for the UK to retain access to EU financial markets after the Brexit has taken place, and this also pushed GBP exchange rates higher which is in my opinion why the Aussie Dollars gains against the Pound this week haven’t been as substantial as the they have vs the USD.

If you’re planning on making a currency transfer involving the pairs discussed today, and would like an opinion on the rates or an update if they move dramatically, do feel free to register your interest with me.

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.