Tag Archives: AUD forecast

Will further interest rate cuts result in a drop for the Australian Dollar this year?

The Australian Dollar has continued to come under pressure recently which has helped the Pound recoup some of its recent losses against the currency. One of the reasons for the downturn for AUD is due to the interest rate cut that took place earlier this month, which has pushed Australian interest rates down to record lows. There are now predictions of further rate cuts from the Reserve Bank of Australia with some financial institutions predicting two further cuts this year, which would push the rate down to 0.75% and likely have a negative impact on the Aussie Dollars value.

Aside from these forecasts of rate cuts due to the slowing economy, another reason for Aussie Dollar weakness is due to the ongoing US-China trade war saga, which has caused concerns for the Australian economy moving forward. I would expect to see AUD exchange rates continue to struggle whilst this continues, owing to the fact that China is the countries main trading partner.

From the UK side the Conservative leadership contest is likely to remain the key driver, with Boris Johnson remaining the front runner. This leadership contest along with any Brexit related updates remain the key driver for GBP exchange rates so do keep on top of this if you’re following the Pound’s value due to an upcoming currency requirement.

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.

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.

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.

Australian dollar forecast – Increased volatility set to continue…

The Aussie dollar is being pulled in many different directions at present, as the market is encouraged to consider and take onboard many factors in its assessment of the value of the currency. Domestic economic and political concerns are high ahead of the Australian election this weekend, as are global concerns over trade wars and the impact on the Chinese economy. The Aussie dollar is softer this May under the pressure of such events, and I think may well lose further ground.

The elections this weekend could well see the Labour Party winning the election as their messages on climate change and improving health and education spending appear to hit the right notes with voters. This might well see the Australian dollar weaker after the weekend, since it is expected the increase in spending, might lead to worse economic performance and increase pressure on the Australian central bank, the RBA (Reserve Bank of Australia), to cut interest rates.

Looking forward, investors with a position to buy or sell Australian dollars might wish to be making some plans ahead of the election this weekend to try and protect or manage their position. You can email myself Jonathan Watson on jmw@currencies.co.uk to learn more about this if you wish.

Will the Australian dollar weaken further?

Another concern for me would be the escalating trade wars which so far has seen the US and China, both raise tariffs on each other’s good. Trump has now levied 25% tariffs on US$200 bn worth of Chinese goods, whilst China has retaliated with between 5-25% tariffs on US$60bn worth of goods.

This just adds to the uncertain picture ahead for the global economy and I would expect will lead to a weaker AUD. Whilst the immediate sell off on stock markets and currencies seen earlier this week has been stemmed, with such investments staging a small comeback yesterday, the longer term outlook does not appear rosy.

The Australian dollar is very much supported by a strong global economy, in particular by China and its demand for raw materials. The increased uncertainty globally has seen the Australian economy struggle with inflation at a 16-year low, thereby putting pressure on the RBA to cut rates.

May is presenting much potential for the Australian dollar to come under some pressure, clients with a position to buy or sell Australian dollars might benefit from a quick review with us to discuss the best strategy moving forward. Please feel free to contact myself Jonathan Watson on jmw@currencies.co.uk to discuss more about what might suit you best in this market.

Thank you and I look forward to hearing from you.

Australian dollar forecast : Australian dollar remains in the firing line!

The Australian dollar was always looking like it may struggle in the month of May, and so it has proved to be the case. A series of domestic and global events have all led to increased pressure on the Australian currency, as investors fear over the more immediate political and economic outlook.

On the side of the domestic issues facing Australia, there are numerous economic concerns including inflation being at a 16-year low with stagnating Unemployment a further concern. The Reserve Bank of Australia (RBA) has because of this been under pressure to cut interest rates and it is widely expected will cut at future meetings.

The raising and lowering of interest rates is a big factor in the strength and weakness of a currency, the current projection for lower interest rates down under will only serve to put more pressure on the currency in the future.

Politics is also key in Australia with the national elections due on the 18th May, there is a concern this could be a Labour government which would potentially see the Australian currency weaker. There has been a growing concern over the economic outlook and a Labour government and their spending plans could easily see a weaker currency.

Finally, the global events which are also concerns for the Australian dollar are numerous. This includes the trade wars between the US and China which could see the lack of any agreement weighing on global sentiment and hamper trade confidence in the global economy. As a global currency, the Australian dollar will weaken in times of uncertainty over the global economic outlook and the trade wars are a great example of this.

Moving forward, the Australian dollar looks like it will remain under some pressure and could easily weaken further. A sudden change in sentiment could easily develop however, and clients looking to predict and track movements on this currency should be aware of the potential for a sudden reversal.

To discuss strategy and ensure that you are fully up to date with the latest trends and themes in the market, please don’t hesitate to contact me Jonathan Watson to discuss further on jmw@currencies.co.uk.

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

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.

GBP/AUD hits 1.85 as markets await a busy Thursday for UK data releases

The Pound’s value is rising across the board of major currency pairs today, with GBP/AUD hitting levels as high as 1.8527 at its highest level so far today.

Sterling had begun the day positively and it was boosted around 9.30am this morning as Manufacturing data came out slightly better than expected, with the forward looking Purchasing Managers Index (PMI) figure showing a positive reading of 53.1 meaning that there is an improving outlook within the industry at the moment.

With the chances of an imminent Brexit with no trade deals in place now a lot less likely due to the extension the UK has been given, sentiment surrounding the economy is picking up and not only has this been reflected within today’s manufacturing data release, but also within the property market which saw another slight gain this month and a small year on year improvement of 0.9% despite the uncertainty.

Tomorrow there will be a raft of economic data released around lunchtime by the Bank of England as the BoE’s interest rate decision along with comments afterwards from BoE governor Mark Carney providing an insight into the monetary policy plans moving forward.

Whilst the Pound has been climbing, the Australian Dollar hasn’t been helped as some disappointing data out of China for April has softened the Aussie Dollars value across the board. Those of our readers hoping for a stronger Aussie Dollar should be aware of this due to the interconnectedness of the two economies.

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.

 

Aussie Dollar weakens as rate cuts look likely, how could this impact the Aussie Dollar?

The Australian dollar has had a bad week after hitting the lowest levels of the month against the Pound, and also the lowest levels in 2-months against the US Dollar.

Those of our readers planning on making Pound to Australian Dollar exchanges should be aware that the current levels are within 4-cents from the annual highs, which are also the highest levels seen since June of 2016 making this years annual high the highest levels seen in 34 months.

We’ve witnessed a sell-off in the AUD’s value this week after some disappointing inflation data was released on Wednesday, demonstrating that inflation levels down under are running at a 16 year low. Many economists now believe that there will be at least one interest rate cut this year and that there will be one in June in order to try and stem the weak inflation levels. Up until this point the Reserve Bank of Australia has been loath to hike rates so as to not impact the already overheating property market, especially on the East coast but this week’s data may have been the nail in the coffin.

Moving forward I’m expecting to see AUD continue to soften proving cuts take place, as should they occur the base rate of interest will be at another record low.

If you are planning to make a currency exchange involving the Pound and another foreign currency, 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.

Pound to Australian Dollar Forecast – Brexit Limbo does not bode well for the Pound

UK & Brussels at Impasse

Although investor concerns may have been eased following the Brexit extension the Pound still remains fragile and I would be surprised to see any significant gains against the Australian Dollar until we have firm news on Brexit. It seems as though the UK and Brussels are at a complete impasse, Theresa May has put several different alternatives to her deal to the House of Commons all of which have failed to gain a majority and Brussels have stone walled the UK stating it is the current deal or nothing.

European Council President, Donald Tusk sent out a warning to his “British friends” saying “please do not waste this time .” It seems as though another extension will be unlikely.

Brexit remains in Limbo and I would not be surprised to see us in a similar situation come October.

The Australian Dollar has its own problems however, Housing prices remain inflated in high wage growth areas such as Melbourne and Sydney. It mean Australians are being forced to spend their hard earned money on necessities rather than luxury goods and services.

Australia  has a heavy reliance on China purchasing its goods. The US/China trade war is causing a slowdown in Chinese growth which is having a knock on effect to the Australian economy and in turn the Australian Dollar. Iron ore is Australia’s primary export and fluctuations in its price can cause a change in Australian Dollar value, it is worth keeping an eye on if you have a trade involving the Aussie.

Recent news coming from US/China trade talks suggest an end could be in sight. US Treasury Secretary , Steven Mnuchin has stated we could see a conclusion to the trade war in under a month. If this is the case we could see substantial gains for the Aussie.

There are still however key points of contention. The US would like to keep existing tariffs in place in order to keep pressure on China , while Beijing would like them stopped immediately.

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 18yrs and FCA registered.
If you would like my help feel free to email me at dcj@currencies.co.uk.

Could the Australian dollar weaken further?

The Australian dollar has been weaker in the latest few weeks as investors fears over the Trade Wars remain, plus the expectations on the RBA, Reserve Bank of Australia, increase to potentially cut the interest rate in the future. There has been a growing expectation that perhaps the Australian central bank has been under estimating the extent to which they would need to cut interest rates in the future, based on the ever-changing global developments. If you are looking to buy or sell Australian dollars in the coming days and weeks an awareness of all of these options and outcomes is sensible.

The market is looking like it could be in for a rollercoaster ahead for the Australian dollar as a series of events develop overseas and at home to trigger volatility. One of the key aspects of the Trade Wars is that in disrupting global trade, they are putting pressure on the global economy which will ultimately lead to a weaker Australian currency. Australia’s economy is heavily reliant on the global economy performing well which will support strong demand for the export of their raw materials.

Overall, there is a belief that the Australian dollar is destined to lose value over the longer term, this is evidenced by its recent weakness which will only continue should the market continue to be faced with the evidence of a slowing global economy.

There is important economic news ahead for the Australian dollar with key information released this week on Consumer Inflation Expectations and National Australia Bank Business confidence figures. This will all be seen in the light of the ongoing developments with the US and China trade wars which had been more positive, but just lately have seen uncertainties creep back.

If you have an important currency transfer to make, being prepared is key in this market where events can quickly and suddenly change and unfold. If you would like to run through or discuss the market or our services, then please do not hesitate to get in touch to discuss further.

Thank you for reading and please contact me Jonathan on jmw@currencies.co.uk.