Tag Archives: AUD weakness

Pound to Australian Dollar rate trading at annual high, will the pair now climb higher? (Joseph Wright)

The exchange rate for changing Pounds into Aussie Dollars has traded within half-a-cent from its annual high today, as the almost hit 1.85 again during today’s trading session.

As many of our regular readers will be aware, sentiment surrounding the Pound has improved quite considerably recently after roughly a month ago the UK and EU Brexit negotiators came to an agreement regarding the Brexit transitional deal. This was a topic that limited the Pound’s value prior tot he agreement, as there were concerns that there would be a Hard Brexit which most likely would’ve resulted in a weaker Pound due to the shock to the UK economy.

Now that there is likely to be an interest rate hike from the Bank of England next month, sentiment is improving as the UK economy is showing signs of picking up, even if the Brexit has slowed the economy somewhat.

Moving forward, I wouldn’t be surprised to see the Pound climb from its current levels as I think AUD will continue to lose value throughout the year. Now that the Fed Reserve has begun hiking interest rates in the US, AUD is likely to lose some of its attractiveness as it will no longer be offering one of the highest interest rates within the developed world. At the same time trade tensions between the US and China are likely to limit upside for AUD in my opinion.

There are expectations that the Reserve Bank of Australia will increase interest rates to 1.75% at the end of this year, although up until this stage the RBA has been skeptical due to the overheating property market down under, particularly on the East coast. With the RBA being weary of the effects this could have on the Australian economy, I think they will leave it late before making an amendment.

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.

 

Will GBPAUD rates remain above 1.80?

The pound to Australian dollar exchange rate has been above 1.80 comfortably now for a period and the outlook is now much more positive for the future. The Australian dollar has been losing its shine as investors look for more profitable avenues overseas which include the US dollar. A key driver of late on GBPAUD has been the interest rate changes in the US and the UK, with them hiking, as in the US, or on the way to hiking – the UK.

This difference in outlook compared to the RBA (Reserve Bank of Australia) who are currently refraining from hiking has allowed big movements on the pound and US dollar against the Aussie. The RBA has been monitored very closely over its performance and attitudes to raising interest rates and this will likely continue to be a feature in the coming months.

Generally speaking, I would imagine the RBA will continue to be soft in its assessments moving forwards and this will keep the Australian dollar on the weaker side. Despite this, the Aussie may well find some favour if there are any unexpected twists and turns or bumps in the road on the US and UK path to raising interest rates.

Another factor which will likely weigh on the GBPAUD rate will be the progress on Brexit which could see the pound to Australian dollar rate fall below 1.80 if there are further troubles over the Irish border or concerns over what type of trade deal the UK will get. Any surprisingly strong data from down under might see the Australian dollar fight back against sterling too.

In April I expect a range between 1.78-1.85 as the conditions that have seen us hit the current rates of exchange continue to act as a driver on the pair. Thank you for reading and if you have any upcoming transactions and wish for some insight and information on achieving the best rates of exchange, please do get in touch with me Jonathan Watson by emailing jmw@currencies.co.uk directly.

Aussie Dollar boosted after positive Retail Sales data, where to next for AUD exchange rates? (Joseph Wright)

The Aussie Dollar has received a boost overnight after some positive economic data.

After disappointing in recent months Australian Retail Sales down under have rebounded and impressed during February. Retail Sales rose by 0.6% during the month after slumping in January and December.

Improving sales along with inflation are increasing the chances of a rate hike from the RBA, up from its record lows which is where interest rates currently sit.

The Pound has reached new annual highs against the Aussie Dollar in recent weeks after the Brexit transitional agreement has been arranged between the UK-EU negotiators. This positive news for the UK benefited the Pound along with increasing likelihood of a rate hike in May.

Now that the US Dollar offers a higher return than the Aussie Dollar, it’s not surprising to see the Aussie Dollar lose value as investors move deposits from AUD into the USD. Before the recent rate hikes from the FED Reserve bank in the US AUD had offered one of the highest returns in the developed world, but now that AUD is losing this competitive edge we’re seeing the currency lose value.

Early tomorrow morning there will be the release of Australian Import and Export data along with Trade Balance figures. If you’re planning a currency transfer involving AUD it can be worth setting up target rates in case the best trade levels are available in the early hours when we’re not in the office.

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.

 

Predictions of a higher GBP/AUD rate mount as Brexit transitional deal hopes grow (Joseph Wright)

The Pound to Australian Dollar exchange rate climbed during today’s trading session, with the pair now trading almost at the very top of the current trend.

The mid-market level for the pair hasn’t breached 1.80 in some time but the pair are currently trading in the 1.78’s, meaning that for those planning on making a GBP to AUD transfer are looking at attractive levels considering recent trading levels. I would add that the lower end of the trend is 1.60 so hopefully you can see my reasoning as to why the current levels are around the top of the market.

There are hopes that the Pound will climb further, and this week the Brexit Secretary, David Davis said that the UK ‘can live with’ a shorter transitional period which has boosted the Pound’s value along with the likelihood of UK interest rates climbing sooner than many had expected.

Analysts at Lloyd’s Bank have recently upgraded their forecasts for the Pound to Aussie Dollar rate this year. They had previously expected to see the pair trade at 1.72 at the inter-bank level although the changing tones from the Bank of England and the Reserve Bank of Australia has changed their minds, with them upgrading their views on the Pound’s potential.

There isn’t any major economic data coming out of the UK or Australia this week, so I expect the pair to be driven by politics for the remainder of the week.

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.

Still waiting for GBPAUD to hit 1.80!

Well readers forgive me for my optimism, I have been banging the 1.80 drum for some weeks now. It just proves how tricky the markets are to predict. I still feel there is a very good shot to hit it and I still believe we will hit this at some point in the coming weeks, next week’s RBA (Reserve Bank of Australia) decision could be important.

Critical too will be the outcome from Theresa May’s speech tomorrow which could easily see the pound higher. Personally, I feel the market will either not react much or will possibly move lower on any news. I believe much of the good news and sentiment over Brexit has been priced in already and today was a perfect example of how quickly the mood can change.

Whilst I remain upbeat for the 1.80 we are still at a very good level compared to the 1.60’s and even 1.50’s some client have had to endue in recent years. If you are aiming to buy Australian dollars at 1.80 please let me know via my personal email jmw@currencies.co.uk and I can set you up an alert so you don’t miss the price.

The outlook for the GBPAUD pairing in March will also need to contend with the developments on US interest rates which would see the US dollar stronger and potentially the Aussie weaker. There is a real correlation between the two currencies and clients looking to buy or sell AUD should be aware of the potential for this element to trigger movement and volatility.

For more information at no cost or 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 in the future.

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.

 

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.