Tag Archives: AUD forecast

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.

Important events on the Australian dollar this week

The Australian dollar exchange rate has been volatile in the last few weeks owing to the uncertainty over the future direction we will see on a number of factors. These include the Trade Wars with China and also the outcome from the latest economic data in Australia. Investors are expecting us to see the Australian currency closely reacting to developments on these issues, the immediate outlook is not clear.

China’s economic performance is a key indicator of the Australian dollar as investors track its progress with a view to better understanding where events will turn next. One of the key factors in all of this will be the next steps that the Trade Wars take with investors feeling any negative news would see the Australian dollar weaker.

Overnight are two speeches by RBA, Reserve Bank of Australia, members which will carry some weight in the market. The actions and comments by the central bank are very important in providing some direction on which way the currency will perform in the week ahead. Most notably ahead is the speeches by Assistant Governor Bullock and also Debelle, either of which could prove most interesting for the Aussie.

Last week, there was some more positive Unemployment data released which will have had a more swaying impact on future economic policy from the RBA. Other news I would foresee as being instrumental in shaping the likelihood of market fluctuations will be the ECB interest rate decision. The European Central Bank will provide some insight into their own future monetary policy as well which will influence global risk sentiment.

In targeting a higher interest rate over the longer term, the Australian dollar exchange rate could lose value if investors look to try and shift towards the potentially higher yielding Euro.

If you have a currency transfer involving the Australian dollar and wish to learn of some of the latest market news, please do not hesitate to contact me Jonathan Watson directly.

Jonathan Watson

jmw@currencies.co.uk

GBP/AUD hits lowest level in 10-days as Brexit issues weigh on the Pound

The Pound to Aussie Dollar exchange rate has fallen to its lowest levels of the past 10-days. This has happened after GBP/AUD hit an annual high of just over 1.87 last week, which was also the highest level since the major drop in June of 2016 when the Brexit vote outcome was announced.

Sterling had hit such high levels against AUD as hopes of a Brexit deal being agreed shortly were high. These hopes are now fading and GBP exchange rates have softened across the board of major currency pairs as it now look likely that UK and EU negotiators will not be able to agree on the terms of the Brexit deal by the EU’s deadline.

Later this week there will be an EU Summit in Brussels and the main focus is expected to be the Brexit. UK Prime Minister, Theresa May will give a speech to the EU leaders regarding her plans and the progress made so far. There will also be meeting behind closed door’s that she isn’t invited to, and depending on the outcome of the recent negotiations and the EU Summit this week I think there could be movement for the GBP to AUD rate.

The Aussie Dollar hasn’t lost a dramatic amount of value against the Pound as markets will still be holding out for a Brexit deal by November, but seeing GBP/AUD drop over the past few trading days is worth considering for those of our clients planning on making a transfer.

From the Australian side there will be Employment data out of Thursday at 1.30am UK time. 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.

 

Price changes for GBP/AUD likely to be driven by the Pound over the next 24-hours

Those of our clients and regular readers following the Pound to Australian Dollar exchange rate should pay close attention to UK politics today, as I believe the next spike in the GBP/AUD’s value is likely to be driven by UK politics.

Yesterday all eyes were on Boris Johnson’s speech at the Conservative Party Conference, and he didn’t disappoint as he gave another harsh critique of the ‘Chequers plan’ devised by the current UK Prime Minister, Theresa May. Today there could be movement for Sterling exchange rates against all major currency pairs as it’s the final day of the Conservative Party Conference, and Theresa May is scheduled to speak with Brexit being the main focus.

Yesterday Boris Johnson was supportive of May’s leadership but he once again urged her to move away from the Chequers plan she has devised and suggested that she focuses more on a Canadian style deal. I expect her to be questioned on his comments and the markets to follow her responses closely. With Brexit now just around the corner and expectations of a deal being in place by November, I expect to see Brexit headlines dominate financial media and for it to be the main driver of the Pound to Aussie Dollar exchange rate.

On the Australian side we’ve seen the currency soften over the past year, mostly owing to Aussie Dollar weakness. The greater the gap between US and Australian exchange rates the more likely this trend will continue, so those following the strength of the Aussie Dollar should also pay attention to US monetary policy and this is something we can help our readers with should they wish.

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.

Selling falls against the Australian Dollar after chances of a No-Brexit deal increase

The Pound to Australian Dollar rate has fallen below the key 1.80 mark during today’s trading session. This is key as the GBP/AUD pair had previously consolidated above this level and traded as high as 1.85 before the recent fall which has taken place because of the Brexit related comments this week.

At the time of writing the EU leaders are all currently in Austria, as they have been for the past couple of days as there is an informal summit taking place. Whilst there have been some positive comments regarding Brexit recently the summit has all together been a negative for the Pound as the currency has fallen dramatically against a range of currency pairs, with the fall against AUD being quite dramatic in terms of recent price movement which has mostly been thin.

Much of the talk revolves around the Chequers deal, and whether or not it will be both the preferred approach of the UK government and also accepted by the EU members, which at the moment is looking unlikely especially after a speech by UK Prime Minister, Theresa May today.

There is a bank holiday down under on Monday of next week, as it’s the Queen’s birthday and there aren’t any major releases until next Friday which means I’m expecting the Pound to be the main driver of currency fluctuation between the GBP/AUD pair.

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.

What can we expect this week for GBPAUD exchange rates?

The week ahead for the Australian dollar looks set to be dominated by continuing news on the likelihood of future interest rate hikes down under. Last week saw a mixed bag of data as investors weighed up the conflicting signals and the overall outlook on the currency pairing. This was underscored by a very positive unemployment report which helped the Aussie to rise against its counterparts. Good news on the Australian dollar has however been tempered by the worrying prospect of fresh economic tariffs from Trump on China, Australia’s main trading partner.

The main economic news this week will be the RBA, Reserve Bank of Australia Meeting Minutes and also the House Price Index released this evening. Later in the week we will also see the the RBA Bulletin and also a speech by Assistant Governor Christopher Kent. It was a speech by RBA Assistant Governor Bullock last week which saw movement on the rates as he highlighted growing household debt.

Clients with a currency transfer involving the Australian dollar could now face a range of events to move the rates, it does appear the factors which have weakened the Aussie in recent weeks, are set to remain. Global concerns over Trade Wars which are set to negatively impact China will weigh on economic sentiment and this will influence the Australian dollar.

If you have a transfer to consider buying Australian dollars with pounds there is also the EU Summit which is coming up which could see a volatile week on GBPAUD exchanges. Brexit continues to be the main driver on the pound and this information could see some volatility on the pair.

If you have a transfer to make involving the Australian dollar, we are in business to offer assistance with the timing and the planning of any currency transfers. For more information at no obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Jonathan

Will the Australian dollar rise or fall in September?

The Australian dollar is likely to come under increasing pressure in my opinion, as we approach a series of important domestic events in Australia and also some global issues which might driver its value. At home, concerns over the political outlook from a fractured government combine with concerns about the economy. Abroad the Trade Wars between Trump and China puts pressure on the Chinese economy, Australia’s biggest trading partner.

The Australian dollar has typically attracted investment from abroad owing to its high interest rates, a currency’s value can often be determined by the yield or return available to investors. Expectations for the Australian dollar are now lower with the US raising interest rates to a level now higher than Australia. Even the UK and Eurozone, both scarred by political and economic uncertainties in recent years, are on a path to raise interest rates.

This puts the Australian dollar on the back foot and means it cannot perform as well as it has done in recent years. Australian interest rates reached a peak of 4.75% but are now currently 1.75%. This has generally made the Australian dollar a less attractive currency to hold and I believe this will continue.

Some of the fundamental factors driving the currency markets are good indicators of future performance. The fundamentals on interest rates suggest that Australia will not be raising before either the UK, possibly the Eurozone and certainly not before the US. This will mean these currencies become more attractive to hold and might gain against the Aussie.

Political concerns in Australia have not diminished in Australia and these could see further weakness for the currency in the future. Wider global concerns could also be felt by the escalation of tensions from the Trade Wars in China, there is plenty to weaken the Aussie down the line.

If you have a transfer buying or selling Australian dollars then please do not hesitate to contact me Jonathan Watson to discuss further.

Jonathan Watson

jmw@currencies.co.uk

Will the Australian Dollar continue to weaken, and what’s causing the weakness?

The Aussie Dollar is under pressure at the moment, with the currency hitting a 20-month low against the US Dollar earlier this week which has hit the headlines. This most recent drop off was spurred by a number of major Australian banks such as Westpac, Suncorp and Adelaide Bank have all increased their mortgage lending rates.

The ongoing saga surrounding the US and Canada’s North American Free Trade Agreement has also weighed on the Aussie Dollars value as sentiment surrounding the emerging markets has waned, after the talks between the US and Canada didn’t result in an agreement. The South African rand has also lost a lot of value recently for similar reasons.

No interest rate hikes are expected from the Reserve Bank of Australia until at least this time next year, and with US interest rates now higher than Australia’s the currency has lost a competitive edge which is another reason for the AUD weakening.

Moving forward I’m expecting to see the issues between the US and Canada as well as the issues with China to continue to weigh on the Aussie Dollar’s value. This is because of the Australian economies dependence on a strong global economy especially as the country becomes more service based.

This week there are a few further data releases that will provide us with an overview of the Australian economy, as trade Balance figures are released tomorrow and Home Loan Figures will be released on Friday.

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.