Tag Archives: AUDGBP

Could we see Monetary Stimulus from the RBA? (Daniel Johnson)

Pound to Australian Dollar Forecast

This year the Reserve Bank of Australia (RBA) has continued to cut interest rates leaving the base rate at a record low of 1%. The change in monetary policy has so far failed to stimulate growth in the Australian economy which has resulted in the RBA board looking at  alternative methods of stimulus to try and aid the struggling economy.

There is the potential that quantitative easing (QE). QE is essentially pumping money into an economy in order to stimulate growth, printing money causing huge levels of debt.  The minutes of the RBA’s July meeting revealed that these unconventional monetary policy measures were discussed.

Both the Pound and the Australian Dollar are under pressure at the moment, although for different reasons as the Australian Dollars are mostly due to economic uncertainty as opposed to the UK’s ongoing political issues.

Over the past year the GBP/AUD rate is almost flat although in recent months the Aussie Dollar has mostly benefited from Sterling weakness which has kept GBPAUD below 1.80 for almost 2-months now.

The time scale for a deal on Brexit does not make good reading. Parliament is not due to reconvene from recess until early September which will leave just under eight weeks for Boris Johnson to get a deal in place. This is something Theresa May couldn’t do in over two and a half years.

Boris has threatened to leave the EU with no deal in place and has said he is not willing to negotiate with Brussels unless they’re willing to drop the Irish back stop. This is something Brussels have stated on numerous occasions they are not willing to do. The situation has not been taken well by investors and sterling has fallen in value as a result.

There is also the possibility of a general election and it will be interesting to see how the market will react. If we look at the 2010 general election for example, we saw sterling lose value due to the political uncertainty, but if Corbyn were to call for an election the probability of a no deal decreases which could cause a rally for the Pound.

The higher probability of a no deal the weaker you  could expect the pound to become.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, there could be little reason to justify significant gains for the pound.

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 19yrs. 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

 

US/China Trade War hurting AUD (Daniel Johnson)

Australian Dollar Forecast

AUD  has proved fragile of late due to several contributing factors. There are domestic issues, such as the high value of living in high wage growth areas. This is causing Australian residents to cut back on retail spending. One of the key issues at present is the knock on effect from the US/China trade war.

Australia has a heavy reliance on China purchasing its’s goods and any effect on Chinese growth can have ramifications on the Australian economy. As the trade war escalates so does the potential for the Australian dollar to weaken. President Trump has recently implemented a further 10% tariff on $300bln worth of Chinese products. The Chinese have retaliated by urging  Chinese businesses  to cease purchasing US agricultural products.

Goldman Sachs believe the trade war could continue for some time which does not bode well for the global economy let alone for Australia who has close economic ties with China.

There is the possibility of further interest rate cuts from the Reserve Bank of Australia (RBA) in 2019 according to the bank Governor, Philip Lowe. This could cause movement for the Australian dollar.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, I can find  little reason to justify significant gains for the pound.

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 19yrs. 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

Pound to Australian Dollar continues to trade just below 1.80, which factors could see the pair breach this level?

Earlier this morning GBP/AUD tested the 1.80 resistance level, with the pair hitting 1.7998 before easing off and at the time of writing the inter-bank level is 1.7940. The Pound to Australian Dollar rate has remained below the 1.80 handle ever since dropping below it at the beginning of July and based on the number of times we’ve seen the pair test 1.80 it could take some significant to see the pair return to trade levels in the 1.80’s.

AUD was dragged downward by the New Zealand Dollar earlier this week when the Reserve Bank of New Zealand surprisingly cut interest rates by a greater margin than market commentators had expected, resulting in a drop in the New Zealand Dollars value and this negatively impacted AUD also.

Later this week there will be a speech from Reserve Bank of Australia governor Lowe, and I think the markets will follow this closely in case he decides to follow the footsteps of the RBNZ and signal further cuts in future from Australia’s central bank. This could potentially result in a weakening of the Aussie Dollar which could then help the GBP/AUD rate move above 1.80 so those following he pair should be aware of the speech this 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.

Pound to Australian Dollar Forecast (Daniel Johnson)

Inflation & US/China trade war a concern for Australian Dollar Investors

The Pound has lost ground against the Australian Dollar of late which can be largely attributed to the lack of clarity surrounding Brexit.  Australia has had it’s own trouble however.  Inflation continues to be a problem down under and it is still some way behind the Reserve Bank of Australia’s  (RBA) 2-3% target. The RBA cut rates earlier in the year to 1% in an attempt to combat inflation and there is the possibility of further rate cuts during 2019. The next interest rate decision is due during the early hours of tomorrow and although rates are expected to remain unchanged the statement following the decision from the RBA could influence markets if it is again reiterated there is the possibility of further cuts later down the road.

The heavy reliance on China purchasing Australia’s exports is also causing problems for the Australian Dollar. As the US impose increased tariffs on China, China’s growth slows which in turn has a knock on effect to the Australian economy. Investors are choosing to move away from riskier commodity based currencies in favour of save haven currencies such as the Swiss Franc or US Dollar.

Increasing probability of a Brexit No Deal

Despite the problems in Australia, Sterling still could face further losses. Boris continues to threaten no deal and stated last week he would be ‘turbocharging’ preparations to leave the EU without a deal. Boris is using the threat of a no deal as ammunition to gain a more favourable deal on Brexit. Basically speaking however, the higher the probability of a no deal the weaker you would expect the Pound to become. Brussels stance remains unchanged again reiterating there will be no concessions to the current deal on the table. It is not in Brussels interest to let the UK leave with a decent deal, they do not want other members of the bloc to consider following suit.

The timeline is also a concern. The parliamentary recess concludes 3rd September leaving less than 8 weeks to get a deal in place, keep in mind Theresa May had two and a half years. According to Bet Fair there is a 57% chance of a general election, if you look at when previous elections have taken place the currency in question tends to considerably weaken.  The British 2010 general election serves as testament to this.

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 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are authorised 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

GBP/AUD rate remain under pressure as Bank of England cuts growth forecast

The Pound to Australian Dollar exchange rate remains close to the lowest levels seen in over 6-months as pressure continues to mount on the Pound across the board of major currency pairs. Since becoming Prime Minister Boris Johnson has ramped up the no-deal Brexit rhetoric and this has rattled the markets which has seen the Pound lose considerable value over the past month or so as his appointment as Prime Minister became a forgone conclusion.

Yesterday the Bank of England opted to hold interest rates where they currently are, but the highlight of the day was BoE governor Mark Carney’s warnings regarding the economic outlook for the UK economy now that a no-deal is looking increasingly likely.

The BoE now expects to see a 33% chance of a recession due to Brexit uncertainty, and earlier in the day the new government outlined plans to spend up to £2.1bn on no-deal Brexit preparations which demonstrates the intent of the new government.

The growth forecast for the UK this year has been cut to 1.3% from the previous 1.6% expectations, and much of the slowing economy is being put down to both uncertainty as well as a lack of foreign investment.

Moving forward we could also see the Aussie Dollar come under pressure, as this week US President Donald Trump has outlined plans for additional tariffs on China and trade talks between the two appear to have stalled once again which has seen a global stock market sell-off. A slowing of the Chinese economy would likely result in a weaker AUD due to the interconnectedness of the two economies.

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 boosted by better than expected Chinese data, could GBP/AUD test its annual lows anytime soon?

The Pound to Australian Dollar exchange rate continues to slide as pressure mounts on Sterling now that the talk of a no-deal Brexit is ramping up. Boris Johnson, the UK’s new Prime Minister has now been PM for just over a week and already during this time we’ve seen sentiment towards Sterling drop as fears of a shock to the economy later in the year and taking their toll on the currency.

GBP/AUD has some distance to fall yet before we begin seeing annual lows, but Sterling has been in the headlines over the past week as GBP/USD has hit a 28-month low and GBP/EUR has hit a 22-month so Sterling is finding itself int he news for the wrong reasons.

The lowest the GBP/AUD exchange rate has been in the past 52-weeks is 1.7210 and at the time of writing it’s currently 1.7635, so as you can see there a bit further for GBP/AUD to fall before it catches up with some of the other major currency pairs. The Australian Dollar has been boosted this morning as Chinese Manufacturing PMI rose to 49.7 in July which is a slight improvement on the June figure and also better than expected. Investors won’t get carried away though as the figure remains below the 50 expansion/contraction benchmark. Strong data released out of China is likely to have a positive effect on the Aussie Dollar due to the link between the two economies, so those of our readers following the AUD’s value should look out for Chinese data.

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.

GBP/AUD hovers above 1.77 as markets await confirmation of new UK Prime Minister, with Boris Johnson the favourite

After a quiet month or so regarding Brexit updates and GBP volatility, the markets are now gearing up for the announcement of the new Tory leader and Prime Minister with frontrunner Boris Johnson expected to win by a clear majority.

It’s likely that the announcement will be made tomorrow and as we’ve seen over the past weekend there could be Conservative Party members that will wish to step down from their positions if Boris Johnson becomes Prime Minister.

Sterling has gradually lost value since the beginning of May against the majority of currency pairs as the likelihood of a no-deal Brexit has increased. Boris Johnson was one of the key figureheads of the pro Brexit movement and he’s suggested that he’s more open to the idea of a no-deal Brexit and leaving without a deal in place come October the 31st. This is why the Pound has come under pressure so those of our readers following the GBP to AUD exchange rate should be aware of this and the markets perception of Boris Johnson’s plans.

Data is light out of Australia this week, but I would expect all eyes to be on Reserve Bank of Australia Governor Philip Lowe’s speech in the early hours of Thursday morning. Any hints at future monetary policy from the RBA are likely to impact AUD exchange rates so it’s worth keeping an eye on this speech for that reason.

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.

Australian dollar forecast – Will the Aussie weaken?

The Australian dollar has been stronger in recent weeks as investors back the currency, following a series of events which were originally predicted to weaken the currency. Firstly, we saw the trade wars of the last 2 years escalating to the point the Australian central bank were keen to cut interest rates. This saw pound to Australian dollar exchange rates rise to almost 1.88 on the interbank rate. We are currently 1.77, and part of the reason for this is a much stronger Australian currency.

The pound has also weakened following the continued uncertainty relating to the Brexit, which so far has seen the pound losing value as no-deal Brexit becomes more likely, as both Conservative leadership candidates look to keep a no-deal Brexit as an option. It has been said Boris is perhaps more keen on no-deal, with the possibility of him as leader opening a greater prospect of this market viewed, potentially pound sinking option.

This week will see increased news also on Australian interest rate prospects, with the latest Speech by RBA (Reserve Bank Australia) Assistant Governor Kent potentially offering up some news. The market is eagerly awaiting to see if the RBA will be looking to cut levels again in the future, the market has been getting mioxed signals with Chinese growth coming in at 27-year low, but still continuing world beating growth and creating demand for Australian exports.

GBPAUD levels could be influenced by the latest news on the Brexit from the new UK Prime Minister, who will be announced tomorrow morning, before being sworn in on Wednesday evening with a speech planned for around 5pm. Any clients with an interest in GBPAUD exchange rates have plenty of news to be conscious of for this week ahead, please do contact our team to learn more.

Thank you for reading and I look forward to hearing from you soon, Jonathan Watson – jmw@currencies.co.uk

Could a slowdown in China result in a weaker Australian Dollar?

Our regular readers will be aware of the connecting between the Australian and Chinese economies, and in particular the importance of a strong Chinese economy and how this can benefit Australia along with the Australian currency.

In the early hours of this morning Chinese GDP figures were released by the National Bureau of Statistics and the data shows that in the second quarter of this year China’s economy grew at its slowest pace since 1992, which is growth at a rate of 6.2%. This figure was expected so we haven’t seen a sell-off in the value of the currencies tied to the Chinese economy which the Australian Dollar arguably is, but it could be a warning sign moving forward.

The trade war between Australia and the US appears to have taken its toll on the Chinese economy, and the efforts of the Chinese Central Bank don’t appear to have has d the intending effect which is why the economies growth is shrinking. Through 2018 the growth figure for the year was 6.6%, and I think that those of our clients and readers that are hoping for a stronger Aussie Dollar should continue to monitor the Chinese economies performance.

Although there will be no data releases out of the UK today, there will be a number of key releases this week such as Earnings Data tomorrow morning and a speech from Bank of England governor Mark Carney tomorrow amongst other releases throughout the week. Do feel free to register your interest with me if you wish to be updated in the event of a major market movement 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.

Australian Dollar Forecast : Will the Australian dollar rise or fall in July?

The Australian dollar has been under some scrutiny as the market gears itself up for two major events which might move the market, there is a growing pressure regarding the uncertainty surrounding the G20 Summit, plus an uncertainty surrounding the outlook from the RBA. The Australian dollar is driven through a variety of domestic and global events, I would not be surprised to see a turbulent week in early July.

There is a very important G20 meeting taking place currently, which may see the Trade Wars topic being discussed, a key factor on the Australian dollar rate since it links back to sentiments on global trade. The Trade Wars have seen the Aussie rise in fall in value, as the market appreciates or dislikes the progress and develops on the trade issues. As a major exporter to China, the Australian economy is sensitive to any news that might help or hinder the Chinese economy.

Domestically, the prospect of Australia lowering rates could see the currency weaker, as the RBA seek to cut interest rates following some weaker inflation data and concerns about the Australian economy. The Australian economy has been waning under various pressures, including the fact its economy has been growing without recession for 27 years. At some point the economy will suffer and struggle, much of the growth in Australia is attributable to China and its dominance, signs of a slowdown could see the RBA cutting interest rates next month.

All in all, it looks like a very interesting time for the Australian currency. The market is becoming increasingly concerned over the future outlook for the Australian economy domestically but also how global events will shape the market. If you have a transfer to make in the coming days, months and weeks, please don’t hesitate to speak to me directly to learn what else is driving the market.

Thank you for reading and best wishes.

Jonathan Watson

jmw@currencies.co.uk