Tag Archives: AUD weakness

RBA Interest Rate Forecast vital to AUD value (Daniel Johnson)

NAB predict Rate Hike as early as August

The National Australia Bank (NAB) has a very optimistic forecast in regards to rate hikes by the Reserve Bank of Australia (RBA). They are a minority. They are of the opinion we could see an interest rate hike by 0.25 basus points as early as August.

“The RBA has indicated that it is in no rush to raise rates in lock-step with global central bank counterparts. However, lower unemployment, and evidence of wages growth moving upwards — even gradually — should be enough to give the RBA confidence that inflation will eventually lift above the bottom of the band,” said Alan Oster, NAB Chief Economist.

“We continue to forecast two 25 basis point rate hikes in August and November, although acknowledge the risks are that these hikes could be delayed.”
Oster attached a couple of warnings which could change the RBA’s decision, noting that a slowing in household credit and house prices due to macro-prudential measures implemented by APRA “may help alleviate some concerns about household debt”.He continued “higher AUD may also threaten this outlook although our revised forecasts are for the currency to be 75 US cents by year end”.

Personally I do not share his view. I think a hike by August is very optimistic and economic data is not consistent enough to warrant a hike . Inflation is some way from where it needs to be and there is no reason to suggest there will be a rapid rise between now and August. This a viewpoint shared by the man that counts. RBA Governor, Philip Lowe who recently stated the following.

“further progress in reducing unemployment and having inflation return to the midpoint of the target range”, adding that it was “likely that the next move in interest rates in Australia will be up, not down”.

He also said “while we do expect steady progress, that progress is likely to be only gradual.

The general consensus is there will not be a rate hike until at least early 2019.

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.

Will the Australian dollar weaken further?

The Australian dollar has been gently weakening since August when the market learnt that the RBA (Reserve Bank Australia) might not be looking to raise interest rates as quickly as many had assumed. With some concerns in the Australian economy, many had questioned whether or not the RBA would be able to do this and the currency weakened.

2018 could easily see similar concerns raised and the currency struggling, I would be most concerned about the property market in Sydney where house prices have risen dramatically and caused many to be priced out of the market. House prices have risen for a long time but the latest data for Sydney showed a small decline which has seen the Australian dollar weaker.

If house prices are falling under their own accord then there is less need to raise interest rates in the future, most clients looking to buy or sell Australian dollars will be subject to this development. The Brexit will of course also be a big factor in this situation, if you have a currency transaction to undertake I would suggest making plans in advance to reduce the uncertainty connected to this situation.

2018 has plenty of events which could trigger unexpected volatility on the currency markets, there are a series of data releases coming soon which could greatly influence the rates. Often currency movements will be short and sharp, you might not even realise you have missed out on an opportunity.

We are here to help with the planning and timing of any currency exchange you will need. As well as offer a proactive service to help you make the most of movements on the currency markets we can undercut the kinds of rates offered by other sources. I have had plenty of clients contact me who are currently using Transferwise or OFX and been able to show them a saving.

For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Will the Pound to Aussie Dollar rate break out of its current trend? (Joseph Wright)

The Pound to Australian Dollar buying rate is continuing to hover around the 1.73 mark at the mid-market level.

Whilst there have been some short term moves away from this level the pairs movements have been relatively tame for the last few weeks, which is quite a change considering how the pair has moved over the past couple of years.

Since the Brexit vote and the fall in the Pounds value due to the shock of the referendum outcome, the pair have remained range-bound between 1.5950 and 1.7950. With the pair currently trading quite comfortably above 1.70 I think it’s fair to say that the Pound is closer to the top end of its 18-month trend as opposed to the bottom, and those planning on converting Pounds into Aussie Dollars should consider this.

Sentiment surround the Australian economy has been buoyed today after Australian Consumer Confidence figures came out better than expected in the early hours of this morning.

This is the best level since the end of 2013 and if economic data releases and gauges down under continue to impress we could see the Aussie strengthen and push the GBP/AUD rate back below 1.70.

If you’re following the pair and would like to be kept updated should there be a big move for the pair, 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.

Sterling climbs slightly as political reshuffle springs no surprises (Joseph Wright)

Sterling sellers have seen a boost to the exchange rates available to them today, after the Pound is up across the board of major currency pairs even if only slightly.

This comes on a day that UK Prime Minister Theresa May has reshuffled her cabinet, with most moves being predictable according to political analysts.

Brexit related news is of course likely to continue to be one of the main drivers of Sterling price movements, although there are reports that the uncertainty surrounding Brexit is beginning to fade. Sterling volatility is expected to wane in the short term future after a market gauge that measures expected volatility was trading at a three-year low earlier today, which means that analysts aren’t expecting to see any market swings in the upcoming months for Sterling exchange rates.

Since the Brexit GBP/AUD has lost quite a lot of value, but the pair are currently trading towards the top end of the recent trend despite GBP losing some value recently as the Aussie Dollar strengthened.

Market predictors are one thing, but I personally wouldn’t rule out a big move in either direction for GBP to AUD exchange rates in the event of a major breakthrough or stumbling block being made public in regards to the second round of Brexit negotiations.

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 bull run pauses as data disappoints, but will AUD/GBP continue to climb in the long run? (Joseph Wright)

The strong upward trend for the Aussie Dollar paused today as financial markets were disappointed with data released down under.

The Pound to Aussie Dollar rate climbed back up to 1.73 today after losing value in recent weeks as the Aussie has been strengthening, but the GBP/AUD rate still has a long was to go to recover back to the high 1.70’s it was trading at just a short while ago.

AUD fell in value today though after Australia’s trade balance figures fell short of forecasts and into a deficit, meaning that the Aussie economy isn’t quite as strong as many had expected.

Recently the Aussie Dollar had been strengthening off the back of substantial gains in the value of iron ore, which is a key export of Australia’s.

Moving forward I expect the par to continue to be driven by both the performance of Australia’s economy coupled with Brexit related updates. Sentiment surrounding how smoothly the Brexit will take place and how the UK economy will fair during and after the Brexit have continued to have perhaps more of an impact on the Pound’s value than the performance of the UK economy, especially when we consider that the UK economy outperformed almost every economists predictions yet GBP is still fairly weak.

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.

Best rates to sell AUD for pounds in 1 month

The pound has been performing much better against most currencies lately including the Australian dollar. The GBPAUD price has recently been hitting the best time since the Referendum vote to buy AUD with pounds. However in the last week a much stronger Aussie has seen the rate drop to the 1.73’s presenting a fresh opportunity for AUD sellers looking to buy pounds. If you need to buy or sell AUD then getting your timing and the price right can save you thousands.

A much better employment report for Australia has helped the currency to rise as it makes the likelihood of any interest hike down the line more likely. The Aussie had actually been much weaker lately, in part due to speculation that the RBA (Reserve Bank of Australia) would keep their base rate on hold for longer. The latest Unemployment news from Australia was much improved with lots of news jobs being created and participation rates increasing.

The Aussie is strong against the pound too because of fresh uncertainty over what lies ahead with the Brexit deals and we can be expected in 2018. We might have secured a deal so far for the more short term and pressing issues, but there is still a long way to go in order to see Brexit fully in full swing. This may take years and the recent improvement in the outlook for the pound, whilst welcome, can surely not be here to stay?

Next week is some further key economic data which could easily trigger market movements, overall I expect markets to be trading on political developments with Brexit. Since it is also holiday season thinner trading volumes in the market could create some extra opportunity!

If you have a transfer to make and wish to get the best rates and latest news, please speak to me Jonathan by emailing jmw@currencies.co.uk

US Monetary Policy Outlook strengthens the Australian Dollar (Daniel Johnson)

FED Hike effects AUD

Before the recent US rate hike by the Federal Reserve the Australian Dollar had weakened against the majority of major currencies in anticipation of the hike. The market moves on rumour as well as fact, which is why the damage had been done. The Australian is appealing to investors due to it’s high returns and  relative safety. But, now following the recent US rate hike to 1.5% the US interest rate and the Australian interest rate are on par. The last time this occurred was between 1997 and 2001. The US Dollar is considered a safe haven currency and due to it now offering the same returns as the Aussie investors have been leaving the Australian Dollar in their droves.

The Australian Dollar has actually strengthened following the decision. This was due to the FED press conference where future monetary policy is discussed. It was stated there would be up to three further hikes next year, but the word “gradual” was used in regards to when they would be implemented. This was unexpected as many predicted a more bullish, optimistic tone.

When rumour starts to filter through that these hikes are going to occur this could well  cause Australian Dollar weakness. If you are an Australian Dollar seller, be wary.

Strong employment Data boosts AUD

Another factor in Aussie strength was strong employment data, The Australian Bureau of Statistics saw employment move higher to 61’600. The highest levels since October 2015. There is still not enough positive data to warrant a rate hike down under.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Is the Pound now overvalued against the Aussie Dollar? (Joseph Wright)

After a strong run for the Pound in recent weeks the pair remain lodged just below the 1.80 mark, which leads me to believe that there may be ceiling for the pair at 1.80 moving forward.

Last week the pair hit a 17-month high after the Pound has benefited off the back of positive Brexit talks, with the current Prime Minister, Theresa May receiving plaudits for her efforts addressing the issue of the Northern Irish border along with the Brexit bill.

Whilst there has been a lot of positive sentiment surrounding the UK and the Pound recently, the Aussie Dollar has been coming under pressure due to fears of a slowing economy down under.

The Aussie Dollar has also been coming under pressure as the Fed Reserve Bank in the US has hiked US interest rates twice (soon to be 3 times if economists predictions are correct) this year. The increasing interest rates in the US have increased demand for the US Dollar and this has seen the Aussie Dollar drop as demand has slowed as investors prefer to hold funds in US Dollars now they can get a return.

Moving forward I think that whether or not the Brexit process continues to progress will determine whether or not the Pound climbs, and it’s certainty worth following the GBP/AUD pair when they trade around 1.80 as this benchmark level is key in my opinion.

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.

FED and EU Summit to drive GBPAUD exchagne rates

This week, events that are not directly involved with Australia and the United Kingdom will dictate GBPAUD exchange rates. 

The Federal Reserve which is the United States central bank, will release there latest interest rate decision Wednesday evening. Speculators are predicting that the FED will raise interest rates from 1.25% to 1.5% which will match the Australian interest rate. Regular readers will be aware that there is a direct correlation between the commodity currencies and the US dollar. As the US dollar is a safe haven and the commodity in some ways is a risk, I expect to see the Australian dollar sold off and the US dollar to be purchased.

The EU summit on the 14th and 15th December, should outline more detail about the Brexit negotiations. UK Prime Minister Theresa May has announced in recent weeks that Brexit negotiations are going well and therefore the UK and EU have agreed to start stage 2 negotiations. If the EU reiterate Theresa May I expect this could provide a further boost for sterling.

Therefore it looks like the Australian dollar could devalue Wednesday evening and the pound could have a finish to the week, therefore my forecast is for GBPAUD to break 1.80 by the close of play on Friday. If you have Australian dollars to sell and need to buy sterling I would recommend getting in touch as soon as possible.

If you are buying or selling Australian dollars in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Pound to Aussie Dollar hovers around a 18-month highs, will the Pound hold on to its recent gains? (Joseph Wright)

The Pound has managed so far to hold onto its recent gains against the Aussie Dollar, despite stalls to Brexit negotiations hitting the headlines over the past week.

There has been hopes of a agreed Brexit bill announcement this week, which would likely push the Pound higher but the there sticking point of Northern Ireland’s terms and its border is proving to be a stumbling block at the moment.

The UK’s Prime Minister, Theresa May has come under pressure for her dealings with her EU counterparts this week after many had expected to see the Brexit bill agreed, only to be disappointed to discover the Northern Irish border issue throw a spanner in the works.

Once the Brexit bill has been agreed the path is cleared for Brexit trade negotiations to begin between the UK and the remaining EU members, which I expect to be a positive for the UK and therefore the Pound. I also think that should a transitional deal be agreed we can expect to see the Pound climb also.

On a negative note for the Pound, should there be further stalls regarding any deals I think the Pound could see a sharp sell-off across the board as the UK is running out of time to make progress at the negotiating table.

If you would like to be updated in the wake of a short term price change between the Pound and the Aussie Dollar, 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.