Tag Archives: AUD strength

Australian Dollar predicted to rise as global economy picks up

The Australian Dollar has been strengthening in recent weeks, with the GBP to AUD exchange rate being a good example of how much AUD has strengthened after the rate has dropped from around 1.85 to around 1.75 over the last few months.

A number of analysts have begun to adopt a hawkish outlook for the Aussie Dollar moving forward, and the HSBC chief economist for Australia and New Zealand is the most recent key figure to share this view. His name is Paul Bloxham and he’s cited the largest increase in 6 years for the counties GDP as a key indicator as to the health of the economy.

A global pick up will benefit the Aussie Dollar due to its export driven economy, but I also think its important that our readers are aware of the importance of the countries services sector as its now more important to Australia than its mining sector.

Next week on Thursday there will be a number of key releases out of Australia, mostly covering the health of the countries employment sector. If you would like to plan around this event do feel free to register your interest with me.

The economy is likely to remain resilient in the face of trade wars breaking out, due to its close trading relationship with China. One downside though is that the RBA doesn’t plan on hiking interest rates until next year, meaning that the currency may lose some of its competitive edge.

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.

 

Little reason for optimism for AUD buyers (Daniel Johnson)

GBP/AUD –  Sterling has lost significant ground against he Aussie of late. The buoyancy levels of 1.80-1.85 are gone. GBP/AUD currently sits in the 1.75’s.

This is predominantly due to Sterling weakness rather than AUD strength. There is little reason to be optimistic at present for Aussie buyers. The Brexit situation is likely to be drawn out and problematic, with votes on areas of the deal having to be passed back and forth between the House of Commons and the House of Lords for approval. Throw into the mix that many of those involved in negotiations have ulterior motives, seeking to fulfil there own agendas and Sterling could remain weak for the foreseeable future.

Economic data has also been appalling from the UK, particularly GDP which came in at 0.1%, the worst data release on GDP for over five years. The proposed interest rate hike from Bank of England (BOE) in May did not occur and I would be surprised to see one this year.

Australia is heavily reliant on China buying it’s raw materials, in particular iron ore and the US threatening to impose huge tariffs has the potential to slow Chinese growth which in turn will hit the Australian economy. China has agreed to purchase more than USD 200bn in goods and services from the US which has put a hold on the tariffs, the Aussie benefited as a result.

Current trading levels are poor for Aussie buyers, but it could get worse. I can appreciate the reluctance to trade due to the psychological aspect of trading at current levels when it was 1.84 only a short time ago, but believe me there is very little justification to get to those levels again in current market conditions.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

 

Factors impacting GBPAUD exchange rates up until the end of the week

Overnight China are set to release a few data releases which clients involved with an Australian dollar exchange short term, should keep a close eye on. Consumer Price Index monthly figures are set to show -0.1%, however 1% up from last month and yearly inflation is set to fall to 1.9% from 2.1%. If the numbers meet the expectation you would expect to see a slight decline for the Australian dollar.

Later tomorrow morning the UK’s interest rate decision will take centre stage, and this decision has received a fair amount of media attention. 2-3 weeks ago forecasters were predicting that there was a 85% chance of a hike and now forecasters are suggesting a 20% chance due to the slowdown in the UK economy. GDP, inflation and retails sales all dropped last month.

My personal opinion is that the pound could come under pressure after the release therefore I would purchase Australian dollars before the event and sell after.

To finish the week Australian Home Loans is set to be released. With it being well documented that there has been a slow down in the major cities, home loads is set to be released at 0.1%. A high reading is seen as positive as it means investor confidence is high and therefore properties are being purchased. 0.1% is 0.3% higher than last months figure, nevertheless it wont be seen as positive therefore I would expect this to be a non event.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your requirements. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

BOE May Rate Hike now in Question (Daniel Johnson)

GBP/AUD in detail

Following a host of positive data from the UK last month we have seen a complete reversal. We saw a fall in inflation, (which is now below average wage growth), retail sales were shocking, predicted to be – 0.5% coming in at -1.2% and today a fall in GDP to 0.1% when 0.3% was the expectation.

A rate hike from the Bank of England (BOE) was widely expected in May, however Mark Carney, Governor of the BOE said in a recent BBC interview that a hike may occur later in the year. This along with the poor run of data could well stop the rate hike occurring. Despite this I would not rush out and sell my Sterling to buy Aussie. I still believe we are range bound between 1.80-1.85.

If it drops below 1.80 for more than a few days it may be time to consider moving if you have to move short term. Personally I would hang on for the high 1.83s or 1.84s. If you have real concern consider a Stop/Loss contract for protection.

The Reserve Bank of Australia (RBA) has a quite negative outlook in regards to hiking rates, there is little chance of a hike this year. If you take into consideration the Federal Reserve have already raised rates to 1.75% and intend to hike rates as many as two further times this year you can see why investors are moving from the Aussie to the Greenback. The US-China trade war could also be damaging to the Aussie. If Chinese growth is hindered by tariffs you would expect Australia’s primary export, raw materials to fall in demand and price which would be bad news for the Australian Dollar.

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.

Thank you for reading.

Is the RBA’s monetary policy working, and how will this impact AUD exchange rates?

Australian interest rates have been set at 1.5% for around 20-months now. This is the longest period of time the rates have remained the same and interestingly, this is the lowest that interest rates have been in Australia.

Rates were dropped to this level back in August 2016 in order to stimulate the economy after it begun to show signs of a slowdown, and since then the RBA monthly meetings have been non-eventful. This is in stark contrast to back in 2008-2009 when the rates were changed on almost a monthly basis.

There are no changes expected for the next 6-months, which differs to the forecasts in the UK for example where the Bank of England is expected to hike rates at least once this year, with some forecasters predicting up to 4 over the next 18-months or so. The Fed Reserve in the US is pushing forward with the most aggressive monetary policy changes within the developed world, and this has negatively impacted the value of the Aussie Dollar as people are beginning to pool funds in the USD now that they can get a better return than when they hold funds in AUD.

Due to the Aussie economy not picking up much steam despite the low rates, and the RBA’s tentative approach to raising rates due to fears over an overheating house market, I think that we may see the AUD continue to lose value as the year progresses.

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.

How high could GBPAUD rates go?

The pound to Australian dollar exchange rates has been touching fresh highs as the pound rises and the Australian dollar weakens. A key factor in this trend has been the shift on the US dollar and the UK with interest rate hikes since both the UK and US are looking to raise interest rates whilst the Australian dollar has been weaker because there are no hikes planned.

This trend seems likely to continue in the weeks ahead as we learn more around the Bank of England who appear very keen to hike interest rates in the future. This will be data dependent but the path ahead is looking clearer which will only help the pound further in the future. The same too is definitely true of the US dollar and the US Federal Reserve who are likely to raise rates up to three more times this year.

As the US interest rate is higher now than the Australian interest rate it makes less sense to hold Australian dollars than US dollars. This has seen a big shift in USDAUD exchange rates which is weighing the Aussie dollar down against the pound and presenting much better opportunities to buy AUD with sterling.

The next really key news is this Thursday with the latest UK GDP (Gross Domestic Product) data which could influence GBPAUD rates. I don’t think this will be a majorly important release but next week could see increased volatility with the latest Australian interest rate decision and important US Non-Farm Payroll data released.

I would not be surprised to GBPAUD pushing higher and we could easily hit 1.90 or the high and mid 1.80’s in April. If you are selling Australian dollars to buy pounds moving sooner than later seems the best bet. Otherwise targetting a more beneficial rate on any spikes might prove a profitable and worthy approach.

If you have any transfer buying or selling Australian dollars then understanding the latest news and trends can help you to maximise your rate by trading at the right time. For more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading and I hope like our website and information.

 

Will GBPAUD remain above 1.80?

The pound to Australian dollar rate is looking like it might rise further in the future so for clients looking to sell AUD for pounds a quick move is probably sensible. With the levels now safely above 1.80 fr over a week the prospect for it to dip back below 1.80 seems unlikely. Overall the expectation for clients who will need to buy pounds with Aussies is that moving sooner will probably be best.

We learned this week that the pound should find more favour against the Australian dollar on the back of improved expectations relating to the prospect of interest rate rises. The GBPAUD rate was dealt a double whammy when the US raised interest rates but also confirmed extra buoyancy in future hikes which has kept the AUD weaker against both currencies.

We learned very recently that the RBA (Reserve Bank of Australia) will be looking less likely to raise interest rates in the future, this has seen the Australian currency weaker. Interest rates are a major barometer of what will happen to a currency in the future, the expectations that the US Federal Reserve and the Bank of England will raise interest rates ahead of the RBA is putting the Aussie on the back foot.

The next stages of progress will be made in the coming weeks, any surprise twists and turns on Brexit could unsettle the pound GBPAUD rate but the overall impression looks more positive. If you have a transfer buying or selling pounds and Australian dollars making plans ahead of any spike is the best course of action.

If you have a transfer and wish for some expert information and assistance on the currency markets, please don’t hesitate to get in touch with me directly on jmw@currencies.co.uk.

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

GBPAUD hits 1.80!

The pound to Australian dollar exchange rate is currently rising and has hit the magical 1.80 level this afternoon. This is presenting some of the best fresh opportunities to buy AUD with sterling since the Referendum. This is a very important psychological level of resistance and now this is breached we might struggle to get back below if certain conditions are met.

These conditions stem from a technical analysis of the market that states, generally once a rate has broken a certain level and can remain above it consistently, it will then be more likely to remain above that price. The belief on the rates is that this needs to be sustained over a few sessions for it to be seen as a consistent move. Much will now depend on sentiments towards the ongoing events which have of course driven this shift on the exchange rate.

I feel the pound will now continue to rise against the Australian dollar, this move has been widely expected and appears to be the path of least resistance. With little sign the RBA (Reserve Bank of Australia) will be raising their base rate anytime soon, the Aussie will in my opinion remain on the weaker side.

Sterling is rising on increasing confidence over what lies ahead on Brexit, next week’s EU summit will be a major driver on the GBPAUD pair. Important too will be the latest news from the US Federal Reserve Bank on Wednesday next week, as they look to raise interest rates. A stronger US dollar has seen a weaker Aussie in recent months and years, this could be a very important week ahead for GBPAUD rates!

If you have any Australian dollar transfers buying or selling then making plans around important events is the best way to maximise your transfers. For more information free of charge and 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.

Sterling falls after strong words from the EU, will GBP/AUD continue to fall? (Joseph Wright)

Sterling exchange rates have fallen across the board today, after some strong words from the EU negotiating team regarding Brexit have caused Sterling bulls some cause for concern.

It appears that issues surrounding the Northern Irish border and how the customs union will continue along with whether there will be a hard border between Northern Ireland and the Republic of Ireland.

Regular readers of ours will be aware that it’s Brexit related data that’s causing GBP exchange rates to move the most dramatically at the moment, and today is no different as such as an update from Michel Barnier is impacting the Pounds value to a greater extent than the news of a rate hike from the Bank of England recently.

The Pound to Aussie Dollar rate is now dropping into the mid 1.70’s after testing the late 1.70’s in recent weeks. Tomorrow there is the potential for further price movement as there will be there release of Manufacturing data which will cover expectations moving forward. Then on Friday there will be Services PMI which again will cover sentiment moving forward in what’s a very important sector for the UK.

If you would like to plan around these events do feel free to get in touch with me. Also Bank of England governor Mark Carney and UK Prime Minister Theresa May will be speaking on Friday which may move markets, so again it’s worth being aware of this.

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.

 

Factors effecting AUD (Daniel Johnson)

GBP/AUD – UK Retail Sales hurt Sterling

The Australian Dollar has strengthened against the Pound of late due to retail sales data coming in lower than expectations on Friday.
The Office for National Statistics (ONS) reveals the data for both year on year and month on month changes. Retail sales volume was up 1.6% year on year in January, an increase from the previous period 1.5%, but still well below the expected 2.5%.
The monthly growth rate for the quantity bought increased by 0.1% with declines across all main sectors except non-food stores. The results were buoyed by small rise in the purchase of sporting equipment due to the January gym rush this helped offset a fall food sales.
The results were taken as negative and Sterling has suffered as a result.
Richard Lim, Chief Executive of the research consultancy Retail Economics stated the following:
‘Following a wave of profit warning and job cut announcements, these figures confirm a terrible start to the year for retailers. Indeed the worst January since 2013’.

Interest Rate Forecast from the RBA

Philip Lowe, Governor of the Reserve Bank of Australia spoke on Friday and stated that a rate hike would be dependent on inflation rising and further falls in unemployment. He did however say that in regards to a change in monetary policy the RBA would ‘move interest rates up, rather than down’. Inflation is s ac concern down under but Lowe said a strengthening global economy would help put inflation back on the agenda. These statements did cause the Aussie to strengthen against the majority of major currencies. Personally I would be surprised to see a rate hike this year.

Iron Ore Crucial to the value of AUD

Iron Ore is Australia’s biggest export, predominantly to the Chinese. Fluctuations in the price of Iron Ore has a result on the Aussie. Metal Bulletin’s Iron Ore index climbed to the Highest level since January 2011 which bodes well for the Australian Dollar.
I am of the opinion the Pound is chronically undervalued at present. Brexit uncertainty is currently anchoring Sterling and will do until we have clarity on a Brexit deal.

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 minuites 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 16 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.