Tag Archives: AUD/EUR

Will pressure on Sterling result in further falls for GBP/AUD, even if the RBA doesn’t want a stronger Aussie Dollar? (Joseph Wright)

There has been a lot of talk recently from both economists as well as the Reserve Bank of Australia that the Aussie Dollar is an overvalued currency.

Of all the major currencies the Aussie Dollar is the 4th best performer so far in 2017, and whilst this sounds like a positive thing to many the reality is an overvalued currency isn’t great news for export driven currencies due to the fact that it makes purchasing goods from Aussie more expensive, and therefore negatively impacts the economy.

The issue the RBA have is that cutting interest rates again in order to stem demand for the currency isn’t easy, as the likely market reaction within the property market would be negative. This is why I don’t think there will be a rate cut, as the property market is already overheating and if they make mortgages even more affordable that problem could spiral, especially in the East-cost of the country where property prices are already very high and unaffordable in many cases.

The Pound is coming under increasing pressure due to the Bank of England’s decision not to raise interest rates, and also just yesterday it emerged that the BoE’s forecast for the UK economy in 2017 isn’t going to grow at the rate they had previously expected.

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 against the Aussie Dollar as the RBA warns of strong currency putting pressure on Australian economy (Joseph Wright)

The Pound to Aussie Dollar exchange rate hit 1.66 in the early hours of this morning, and this was the first time in over 2-weeks that we’ve seen the Pound trade this high.

The headline comments from the Reserve Bank of Australia in the early hours came in the form of a warning, saying that the ‘Aussie’s recent strength has been placing pressure on the Australian economy’ and this resulted in the selling off of AUD.

The RBA appears to be fairly neutral in its outlook for future growth after suggesting that forecasts for the Australian economy remain unchanged (currently at 3% annually).

The fall for the Aussie dollar came after data showed that sentiment within the Manufacturing sector strengthened, along with the positive move of 7% increase in the value of Iron Ore which has given AUD a boost.

It appears that the RBA would prefer a weaker Aussie Dollar and I think that those planning on converting Aussie Dollars into Pounds should consider the gains they’ve seen recently, and whether they think the Aussie can continue to strengthen at its current rate.

This Thursday is likely to be a busy day for Sterling exchange rates as a whole and I expect to see the GBP/AUD rate see volatility. Thursday is being billed as ‘Super Thursday’ and if you would like to discuss why in future detail do feel free to get in touch.

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.

 

Political and Economic uncertainty weigh down the Pound (Daniel Johnson)

GBP/AUD – Will Sterling’s woes continue?

The pound has had a terrible time recently, GBP/AUD currently sitting at 1.6408. A small increase in GDP this week did little to bolster Sterling’s position. There are many reasons for Sterling’s weakness and I am struggling to find any reason for the pound to rally. The vote to exit the EU is having a huge impact on the UK economy. UK Inflation has been on a rising increase of late, reaching a high of 2.9%. If the rise continued there was potential the Bank of England would increase interest rates. Several members of the Monetary Policy Committee changed their stance and voted in favour of a rate hike. The rumours of a hike caused a short lived spike for the pound, however more recent inflation data saw a fall to 2.6%. With the chance of a rate hike now dashed, the pound fell in value against the Australian Dollar.

I believe a rate hike is not the solution to increase in inflation and the recent dip is a positive thing bringing us closer to average wage growth at 1.8% . There is a close correlation between average wage growth and inflation. Imported goods are more expensive due to the weak value Sterling the price increase is now being passed on to the consumer. Provided consumers still consider to spend this is fine, if they do not however the UK economy could be in serious trouble. Historically, political uncertainty weakens the currency in question and fifteen members of the conservative party have recently given a vote of no confidence regarding May’s position as PM. We need a stable government in place in order for the pound to rally against the Australian Dollar. Inflation has fallen on the other side of the pond and this is detrimental to the Aussie, but nothing that will weaken it considerably.

Brexit Talks a key factor on GBP/AUD buoyancy levels

Compromises will have to be made and the “have your cake and eat strategy” will have to be dropped.  Immigration laws need to allow the freedom of movement of people if there is to be access to free trade and this kind of defeats one of the main reasons  .This goes against one of the main reasons that voters chose to leave the EU  and would cause public uproar. Which is why I think compromises will be made, do not think these will happen quickly however it is likely to happen over time to soften the blow to those who voted to leave.

If you have a currency trade to perform I will be happpy to help. It is vital 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 confidence 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.

Will the issues surrounding the Australian property market weaken AUD further? (Joseph Wright)

The Pound to Australian Dollar exchange rate hit 1.7430 at it’s highest point during today’s session, although at the time of writing the Pound appears to have lost all of today’s earlier gains.

It’s difficult to tell which way the rate will move next, although I think that it will be underlying weakness that results in the next big move for the GBP/AUD pair as both currencies are coming under pressure for differing reasons.

China was downgraded by Moody’s (a credit rating agency) for the first time in 30 years due to slowing growth in the region although markets haven’t overreacted as a slowing in growth was inevitable.

This could spell bad news for the Aussie Dollar moving forward due to the interconnected economies (Australia and China) being quite reliant on each other. At the same time further talk of the property markets in Sydney and Melbourne overheating are surfacing again, and with a slowdown in the construction sector down under becoming a talking point as well I think there could be issues for AUD later down the line.

The Pound has also come under pressure due to the terrorist attack earlier this week, and with the election just around the corner we could see further headwinds for the Pound as we get closer to the election date (the 8th of June).

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.

GBPAUD hits 1.70! What next?

The pound to Australian rate has hit the 1.70 mark as investors embrace Theresa May’s plans to call a snap General election. Expectations for the pound are now very much positive as investors find answers to some of the questions of uncertainty which have been plaguing the pound in the last few weeks and months. This is not just a story about the pound, of course, the Australian dollar has fallen back as the RBA indicate what many of us suspected some time ago, further interest rate cuts down the line are a real possibility.

GBPAUD could now move much higher as some of the previous reasons to hold on to Australian dollars evaporate. Expectations for the Australian dollar to move higher have been largely hampered in recent weeks as a mixed bag of economic data and a stronger pound makes life difficult for Australian dollar sellers. If you have Australian dollars to sell and are hoping for big improvements you might need to remind yourself of just how much the market has improved for you since the Referendum! With over 40 cents between the high and the low Australian dollar sellers are now at some of the best rates they have had since 2013!

GBPAUD could now well rise further, particularly since the likelihood is Theresa May will win the election with a very large majority. The overall expectation for the rates is that we could now easily test 1.80 in the next 4 weeks. If you have a transfer buying Australian dollars then making some plans in advance is vital to the understanding of where rates might head.

We could now be about to break into some very much fresh ranges and any clients with an expectation to buy or sell the Australian dollar should be doing what they can to plan in advance for future volatility. If you have a transfer to make and wish to get an overview of the market and receive some updates and news on what might be happening please feel free to get in touch directly with me Jonathan by emailing jmw@currencies.co.uk.

Will risk aversion within the markets continue to weaken the Aussie Dollar? (Joseph Wright)

The Pound is proving resilient in the current market, and despite posting losses towards the end of last week after some less than impressive economic data releases the Pound is remaining strong.

Last Friday data revealed a decline in UK industrial/manufacturing production, and it was also announced that the UK’s trade deficit has expanded. Despite this the Pound is still holding onto the gains its made since the Brexit officially begun and for those planning on making a GBP to AUD transfer, it’s worth noting that the Pound is up 7 cents from its lowest point throughout 2017.

The Pound to Aussie Dollar rate has also been boosted due to AUD weakness as the action taken by Donald Trump in Syria has resulted in risk averse markets, and look no further than the boosts to golds value to confirm this. Commodity currencies tend to weaken in times of risk aversion and the Aussies recent moves have left the currency trading at a three-month low against the US Dollar.

There is also the issue of the housing market in Australia overheating and this issue keeps hitting the headlines.

There’s an argument to suggest that a weaker currency is a benefit for Australia’s export driven economy so I wouldn’t rule out a move from the Reserve Bank of Australia in order to weaken the currency further in order to keep the economy competitive.

Moving forward I’m expecting to see the Pound recover more ground from AUD after the initial drop after the Brexit vote. Those converting Aussie Dollars into Pounds are still in a great position after that drop, but the gains are slipping away as GBP/AUD recovers back to levels closer to 1.70 than 1.60.

If you are planning to make a currency exchange involving the Pound and the Australian Dollar, 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.

 

What can we expect next on GBPAUD rates?

The pound to Australian dollar rate has improved further to the highs seen in January almost touching 1.66. There is some important economic data due out today which could easily change the picture on the rates with UK Industrial and Manufacturing data due at 09.30 am and then an estimate of GDP (Gross Domestic Product) at midday. If you are looking to buy Australian dollars you are currently 7 cents higher than the lows that were established below 1.60 earlier this year.

With markets now eagerly awaiting the latest news on the UK economy the big challenges ahead will be the extent to which the UK weathers any poor economic data or the likelihood of any interest rate hike or cut in Australia. Recent comments by the Reserve Bank of Australia indicate that a cut is more likely which could present yet further opportunities for Aussie buyers in the future.

With the market squarely focused on the US too, economic data today could trigger some movements on the Australian dollar. Any speculation the US might be looking to raise interest rates sooner than expected could weaken the Australian dollar as investors sell off Aussies and increase their holdings of the US dollar. The key US data is Unemployment and Non-Farm Payroll data at 13.30 UK time, it will be closely watched by investors and could easily trigger some movements on the GBPAUD rate.

GBPAUD is up at some of the highest levels we have had since January which is presenting a great opportunity for Australian dollar buyers. If you have a transfer to make in the coming days and weeks these rates will not be around for long. To discuss the latest trends and themes which will move your exchange rate please speak to me Jonathan by emailing jmw@currencies.co.uk.

Will the Australian dollar rise or fall against the pound?

The pound to Australian dollar exchange rates has improved lately as the pound finds some better form and the Australian softens every so slightly. In the most recent communications from the RBA (Reserve Bank of Australia), we learned that the RBA are concerned over rising house prices. We also learned that the RBA view the currency as too strong and whilst only a few weeks ago the view was that the RBA might raise interest rates later this year, for now, the direction appears to me to be fairly neutral. If you are making a GBPAUD exchange in the coming weeks I believe a big factor will be the Article 50 direction for sterling. With plenty of volatility expected nothing should be too readily assumed!

GBPAUD hit 1.59 last week as the lack of interest rate hikes in the United States presented a weaker US dollar. As the US dollar was sold off it benefitted the Australian currency as the Aussie is used by investors to benefit from its higher interest rates. By ‘parking’ funds in Australian dollars, investors have a higher rate of interest and therefore earn more on their money. Such trends help the Australian to strengthen and this partly explains some of the overall strength of the Australian dollar against the pound.

I would expect GBPAUD rates could move as much as 11 cents between the high and the low as markets digest the release of Article 50. I forecast rates between 1.56 and 1.67 depending on how the market receives the news. Because this has never happened before the scope and potential for swings are high.

If you have a transfer involving buying or selling Australian dollars then making some plans in advance is vital. If you would like some assistance with the timing and planning of any transfers you may contact me directly on jmw@currencies.co.uk. I have worked for almost ten years assisting clients buying and selling Australian dollars for pounds and am positive I can offer some useful assistance with a really good exchange rate (above other companies) and some useful information to make an informed decision on when to buy your currency.

Will the Pound fall when the Brexit begins next Wednesday? (Joseph Wright)

The Pound’s value was relatively unchanged in the wake of the UK government announcing the date for the start of the Brexit.

Towards the end of last week it emerged that the 29th of March will be the day Brexit is officially triggered, as UK Prime Minister Theresa May will invoke Article 50 in what Brexit secretary, David Davis has called ‘the most important negotiation for this country in a generation’.

I think the reason the Pounds value remained mostly unchanged is because the financial markets were expecting the announcement, after May made us aware of the governments plans and timescales towards the end of last year.

Personally, I think the Brexit is mostly priced into the Pounds value and I’m actually quite optimistic regarding the Pounds value moving forward. I think the major drops in the wake of the vote have seen the Pound consolidate at its new levels and it appears to see support at the 1.60 level against the Aussie Dollar.

The rising inflation in the UK is also likely to result in an interest rate hike which would likely boost the Pounds value, and there are concerns in Australia that the housing market is overheating, particularly in cities such as Melbourne and Sydney which could impact AUD’s value.

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.

What next for GBPAUD exchange rates?

The pound spiked impressively against the Australian dollar yesterday as the Bank of England indicated the possibility of higher interest rates to help maintain Inflation. The Australian dollar was actually weaker too on the back of Unemployment data which reflected a much weaker Unemployment picture than previously thought. If you are looking to make a transfer in the coming months and weeks than understanding just where the Australian economy and the UK’s Brexit negotiations are headed is key.

The Australian economy has been buoyed by rising commodity prices and continued solid Chinese economic growth and investment. The higher interest rates in Australia also offer investors are solid platform to invest in presenting much greater returns than the in some case negative offerings from elsewhere. Whilst the United States raising their interest rate this week did help the Australian dollar a little more, the Aussie lost ground to rise back above 1.60 on GBPAUD.

I personally think the rate will struggle to maintain itself above 1.60 as the pending UK Brexit negotiations and fears are likely to unsettle the pound. Most commentators believe the triggering of the Article 50 clause will see the pound weaken but I believe we might see some small improvements in the value of sterling here, although ultimately they will prove shortlived.

If you have a transfer to make buying or selling Australian dollars we are a very important time. With rates hovering around 1.60 the prospect of events getting even worse for Australian dollar buyers is highly likely. Clients buying Australian dollars hoping that this is a ‘bottom’ in the recent trends could be in for a nasty shock if we hit 1.55 or worse in the coming weeks.

Many clients said it was painful to buy at 1.80 and even 1.90 last year failing to believe us when we said it would get worse. Some clients also failed to believe us when we had rates above 1.70 and we predicted it would get worse. The global conditions that contributed to the GBPAUD rates sliding to some of the lower levels in the last few years remain and I think Australian dollar buyers need to be very careful about having expectations that are too high.

To discuss the currency markets and all of your options with a currency specialist with almost ten years experience handling the personal and business requirements of thousands of clients in Australia and the UK, pease contact me Jonathan Watson on jmw@currencies.co.uk or call 01494 787 478 in UK business hours.