Tag Archives: AUDGBP

US/China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Progress in US/China talks

Due to Australia’s heavy reliance on China purchasing its goods and services any fall in growth from China has an impact on the Australian economy and in turn the Australian Dollar.

The US/China trade war is a huge concern amongst investors, a trade war between the world’s two largest economies has huge implications. The Trump administration wants China to change its economic strategy, something Chinese President,  Xi Jinping will be reluctant to do. The changes that are being asked for would hit the Chinese economy hard and  long term. It may be the case that the Chinese will try and give very small concessions in  bid to lengthen the trade war and out last Trumps reign. A dangerous game considering the US has threatened to increase tariffs to 25% should their terms not be met. 25% is a huge increase and if China retaliate both economies will suffer not to mention the global impact.

At present, trade talks seem to be progressing well.  When asked about how talks were going yesterday in Beijing, US Treasury Secretary , Steven Mnuchin replied “so far so good.”

If it were not for the lack of clarity surrounding Brexit I think Sterling would be making gains against the Aussie. Although, the pound could lose value as negotiations with Brussels intensify I think the likely outcomes are either an 11th hour deal or an extension, both of which could cause significant Sterling strength. Morgan Stanley recently suggested there was less than a 5% chance of a no deal scenario. The market moves on rumour as well as fact so due to a no deal Brexit being largely factored out of the equation at present, if it were to occur expect  a large drop in the pound as this outcome is definitely going against the grain.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavour 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 18yrs and FCA registered.If you would like my help feel free to email me at dcj@currencies.co.uk.

US China Trade War Intensifies (Daniel Johnson)

AUD losing investor confidence

Australia is heavily reliant on China purchasing its goods and services. Any fall in Chinese growth has a knock on effect on the Australian economy and in turn the Australian Dollar.

The US China trade war is a serious concern for investors and it is pushing them away from riskier commodity based currencies such as the Australian Dollar. The US and China are currently in talks and the Trump administration wants China to make fundamental  changes to its current economic strategy.

If China were to make some of the changes requested it would have serious implications on the Chinese economy. Chinese President, Xi Jinping knows this and it may be the case that he will try to make as little concessions as possible in an attempt to outlast Trump’s reign.

It is a risky game considering the US has threatened to increase tariffs by 25% on $200bn worth of goods. The US has said they will implement the tariffs if the two sides fail to make progress by 1st March.

According to a UN trade agency report Asian countries would be the most effected. The implications of such an increase should not be understated. With two super powers trading blows the effect will be wide reaching and will hit the global economy.

The Australian Dollar could be among the hardest hit until we have a resolution, which could be some way off, AUD will remain fragile.

If it were not for the lack of clarity surrounding Brexit I think we could see some decent gains for Sterling against the Aussie, unfortunately the uncertainty over Brexit is outweighing concerns down under and the Pound continues to be anchored at low buoyancy levels. There are alternative options to May’s deal being put forward, but there is still no firm way forward. May’s intention is to gain concessions from Brussels that will be accepted by parliament. She has already attempted to this in December after delaying the initial vote. May was stone walled by Brussels and European Commission President, Jean Claude Junker has continually stated there will be no concessions made. Many still believe a deal may be struck at the 11th hour, but Brussels have stuck to their guns up until this point. The PM is currently in a worse position than in December following the diminishing probability of a no deal scenario (one of her only sources of ammunition) with Morgan Stanley predicted there is less than a 5% chance of a No deal Brexit.

If you are looking to move GBP – AUD short term aim for the 1.83s.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 18yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

 

 

 

Australian dollar at the mercy of global news!

The China – US Trade Wars have been a major factor driving the currency markets in the last 6-9 months, impacting the Australian dollar and the economy. Australian economic data has been mixed but with Chinese data reflecting a slowdown, particularly in Manufacturing, the Australian dollar has been softer.

Looking ahead there is lots of important news in the currency markets this week to move the Australian dollar, this includes information at home and abroad. Domestically we have the latest Australian CPI, Consumer Price Inflation, data to move the market. The Australian economy has been mixed and investors are still debating the prospect of interest rate hikes in the future.

Tomorrow is also important with the latest US Federal Reserve interest rate decision, which could be a market mover on the US dollar and thereby impact the Australian dollar. USDAUD is the most heavily traded pairing for the Aussie and any large movement on the USD can ‘weigh’ the Australian dollar down against other currencies.

Later this week we have the latest US-China trade war talks which could be a market mover in the future, clients with any AUD transfers should be keeping a very close eye on the latest news. The meeting this week might yield too much news since there is still a 1st March deadline for the talks to be finalised.

Finally, Friday is the latest US Non-Farm payroll data which might well trigger volatility on the Australian dollar, by altering global attitudes to risk and viewpoints on global trade. Clients looking to buy or sell the AUD should be very conscious of these developments which should see a very busy end to the week for the Australian dollar.

If you have a position buying or selling and wish to get a fresh update o the market and all the important issues driving your levels, please do get in touch to discuss the latest news with me Jonathan Watson.

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

Jonathan Watson

jmw@currencies.co.uk

Will the slowdown in China put pressure on the Australian Dollars value?

The main news within the financial markets this morning is the release of 4th quarter Gross Domestic Product from China. The figure is followed closely owing to its importance, as the Chinese economy is the 2nd largest globally and GDP data measures economic output.

The figure released is 6.4% year on year in the forth quarter, and this was expected. The headlines will centre on the annual figure which is now officially 6.6% through 2018 which is the lowest figure on record since 1990, almost 30 years ago.

Now that the annual GDP figure has been released the concerns surrounding a slowing Chinese economy have been confirmed, and this could spell trouble for the global economy with economies such as Australia’s likely to feel the pinch considering the extent to which the Australian and Chinese economies are intertwined. The negative effects of the US-China trade war can now been seen so hopes of a deal being stuck will be a high as ever, and it’s likely that the talks could impact AUD exchange rates as AUD could react to US-China sentiments.

From the UK side, this afternoon could offer GBP exchange rates some direction as UK Prime Minister, Theresa May will announce the governments Plan B now that her deal hasn’t made its way through parliament. The pound has dropped off slightly at the beginning of this week which is likely due to the anticipation of what will be said later. For now, cross party discussions have come to a halt as the leader of the opposition, Jeremy Corbyn has stated that we won’t talk until a no-deal is ruled out.

I think that this afternoon’s announcement is likely to drive GBP exchange rates to begin with and that the Irish backstop will be a major talking point regarding the new plan.

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 next week’s vote on May’s Brexit deal cause movement for GBP/AUD?

The Pound has been trading within relatively thin volumes this week against most major currency pairs as the currency comes under pressure in the lead up to next week. On the 15th of this month, which is next Tuesday there will be a ‘meaningful vote’ on Prime Minister, Theresa May’s Brexit plan and much of the speculation this week revolves around that date.

The Australian Dollar, despite being the biggest loser in terms of currency throughout 2018 of the G10 countries, has actually been increasing in value over the past week as hopes of a agreement between the US and China over the trade war talks increase. There have been ongoing discussions recently between the two leading economies, and this is a positive for Australia as China is the country’s main trading partner.

So far this morning the Pound has got off to a poor start, as pressure builds in the lead up to next week’s vote, especially after the first planned vote was delayed as May was concerned of a major loss. The latest Brexit related update is that yesterday evening Parliament voted in a new amendment specifying that the government has 3-days to report back to the commons with its ‘plan B’ in the event that May loses next week.

Economic data is taking a back seat at the moment owing to the importance of UK politics at the moment, but it’s worth being aware that on Friday there will be UK GDP figures released at 9.30am with growth of 0.1% expected. I would expect to see a drop in the Pounds value if this figure disappointing especially if the figure shows a negative figure.

If you wish to be updated and to plan around what could be a busy week for the GBP/AUD pair, do feel free to register your interest with us.

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.

 

Brexit continues to be the main influence on GBP/AUD (Daniel Johnson)

Could Brexit January 15th vote simply lead to another?

GBP/AUD rates continue to be largely dictated by Brexit. Theresa May has now confirmed 15th January as the date that parliament will vote on her current deal. The vote was originally delayed due to May’s lack of confidence in the deal going through. European Commission President, Jean-Claude Junker has said there will be no changes to the current deal and he is only willing to clarify the current terms. Could it be the case that Junker will make concessions? Or could the threat of a no deal Brexit force a vote through?

May has suggested if the deal does not go through at her first attempt then there will be a second vote, this could point to out that she feels Brussels will change it’s stance. There is still a huge lack of clarity surrounding Brexit which is not sitting well with investors. The majority of scenarios are Pound negative, but if May were to be ousted or resign we could see a second referendum back on the table.

If May’s deal does not go through we  could see a leadership challenge from Corbyn or indeed we could see her resign if it looks like the deal will have no chance of going through, although  I don’t take her for a quitter. I am not a particular fan of May, but you cannot help but admire her perseverance.

If you look historically if a country loses it’s leader the currency in question would weaken, however in this situation it will be interesting to see how the market reacts. We could see an initial fall due to political uncertainty, but if it appears a second referendum comes to the forefront it is widely predicted that the vote would come in in favour of remaining in the EU according to polls. This could boost investor confidence and in turn the pound.

Would I be hanging on for this if I was selling Sterling?

The answer is no. The majority of Brexit outcomes  result in Sterling weakness, if you have to move short to medium term I would be looking to take advantage of current levels or at least a tranche for safety. The ongoing trade war between the US and China is a concern for the Aussie and if it were not for Brexit I think Sterling would be experiencing gains against AUD, unfortunately the lack of clarity surrounding Brexit is outweighing the trade war.

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.

 

 

US-China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Pound Value hinges on Brexit Deal

Brexit is anchoring the Pound against the majority of major currencies due to the lack of clarity surrounding Brexit. The current situation is not a good one, May’s deal in it’s current form seems to have little chance of being passed by parliament. The lack of faith in the deal going  through was the reason the vote has now been delayed. Parliament reconvenes on 7th January and the vote will be held on the week commencing 14th January.

The 21st January is the final date the government can release it’s withdrawal plans. The majority of the possible outcomes I would largely consider Sterling negative. Jean-Claude Junker, President of the European Commission has stated that the deal on the table will not be renegotiated and that Brussels are only prepared to clarify the current terms of the deal. In it’s current form the deal does not look like it will go through which would hurt Sterling.

If the deal does not go through it is likely May will face  a leadership challenge from Corbyn or May could resign,  if this was to be the case the further political uncertainty would hurt the Pound. If May is ousted a General Election will be on the cards which does not bode well, but does bring a second referendum back to the table. If a second referendum is announced this could be deemed as pound positive as polls suggest the UK public would now vote to remain in the EU.

A no deal scenario would be the most damaging for the Pound although I am not of the opinion the losses will be as severe as the Bank of England have been touting. Carney suggested there will be over a 25% fall in house prices and GBP/EUR could drop below parity.

US-China Trade War could be prolonged

The US-China trade war continues to weigh on investors mind and many have moved away from the Australian Dollar due to Australia’s heavy reliance on the Chinese purchasing it’s goods and services. The current 90 day truce is in place provided China come to the table to negotiate over their current economic model. I am doubtful any major concessions will be made and the trade war could be prolonged which will hurt AUD. We could see an escalation if sufficient concessions are not made with the US threatening to increase tariffs on Chinese goods by 25%. This would hit both economies hard and also would cause further global economic uncertainty. If it were not for Brexit I think we would be seeing gains for Sterling against the Aussie, but at present the lack of clarity surrounding Britain’s future is holding the pound back.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving.

If you would like my help feel free to email me at dcj@currencies.co.uk.
Thank you for reading.

US-China Trade War does not bode well for AUD (Daniel Johnson)

Prolonged Trade War could hit the Australian Dollar

Sterling remains fragile against the majority of major currencies due to the lack of clarity surrounding Brexit, I feel GBP/AUD would be even lower than current levels if it were not for the US-China trade war.

Australia is heavily reliant on China purchasing it’s goods and services and the trade war is causing a slow down in economic growth. China has being going tit for tat on tariffs with the US and despite the current pause the situation has the potential to escalate.

The onus is on China to get the trade war sorted as quickly as possible. The trade war is a threat to China’s already slowing economy, growth missed economist’s forecasts by 0.1% in the 3rd quarter landing at 6.5%. This is the weakest quarterly growth since 2008.

There is a disproportionate effect on China when compared to the US. China’s exports to the US amounts to a bigger section of the Chinese economy than the amount to which China-bound US exports represent to the US economy. In 2017 China exported USD 50bln of goods to the States form  a USD 12trn total. This is compared to the US who exported USD 130bln worth of goods to China from USD 19trln GDP.

At present there is a 90 day pause on tariffs which commenced at the beginning of December. The US has agreed to hold back on a 25% increase on Chinese products if China agree to negotiate making fundamental changes to it’s current economic model. A 25% increase is extremely high and would no doubt have a severe impact on both economies.

This does not bode well for the Aussie. If it were not for the debacle that is Brexit I think we would be witnessing the Pound strengthen against the Australian Dollar. Brussels have stated they are not willing to make any changes to May’s deal and it glaringly obvious it will not get voted through parliament in it’s current form. We could be looking at a leadership challenge for Corbyn or a no deal scenario which would both hurt Sterling even more. I feel a second referendum could boost Sterling as polls suggest voters would now wish to remain in the EU, I think May would have to go for this scenario to emerge.

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 help feel free to email me at dcj@currencies.co.uk.
Thank you for reading.

GBP/AUD continues to trade towards the lower end of its recent ranges, where to next for the pair and what’s influencing it?

The Pound to Australian Dollar rate continues to trade in the mid 1.70’s just over 1.75, which is around the bottom of its current trend when you look at both a 3-month and a 6-month chart. There has been a steep decline in the Pound’s value from around the middle of October and much of this market movement can be attributed to Sterling weakness as the Brexit uncertainties ramp up with the Brexit date just around the corner now.

Yesterday it was announced that the ‘meaningful’ vote on UK Prime Minister Theresa May’s Brexit deal will take place. It has previously been outlined for last Tuesday but she postponed it the day before owing to fears that she would receive very little support for it. May has since won a vote of no-confidence although there were around of a 3rd of her Conservative Party MP’s that voted against her leadership which shows the discontent with her deal.

The Pound has also lost value against most other major currency pairs recently as time to agree on a deal is running out. There appears to be little scope for amendments to the deal which may be the Prime Ministers downfall as the Northern Irish backstop arrangement is the main sticking point for the deal and the reason for the DUP Party not supporting the deal which has added pressure to May and also the Pound’s value.

Although economic data is not the main driver of GBP’s value at the moment, it’s worth being aware that this Thursday there will be a Bank of England Interest Rate decision and although no changes are expected, any comments to future monetary policy plans could influence the Pound’s value.

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.

Brexit chaos continues as Conservative MP’s trigger a vote of no confidence in PM May, will this put pressure on GBP/AUD?

This morning it’s been announced that a vote of no-confidence has been triggered by the Conservative Party after Sir Graham Brady, the Chairman of the 1922 Committee confirmed that he has received at least 48 letters of no-confidence from Conservative MP’s.

The Chairman of the 1922 Committee isn’t required to announce how many letters he’s received but we do know that it’s at least 48 as this number constitutes 15% of the Tory members. Since the news broke the Pound has actually remained unchanged and this is probably because the vote will take place this evening between 6.00 pm and 8.00 pm so until shortly afterwards we won’t know the outcome and therefore, the next steps for Brexit.

Since the announcement which was around 7.45 am this morning, there have been a number of Conservative MP’s that have outlined their plans to support May, with the general consensus that a change in leadership this far into the Brexit process would be chaotic. If there are a number of votes against against her though, there is a chance she may resign even if she’s not obliged to owing to the lack of support from her own political party.

May has already given a speech outside Downing Street this morning whereby she’s highlighted that if she’s replaced a new leader would have to delay Brexit, as they wouldn’t have enough time to renegotiate the withdrawal agreement.

With regards to the Pound to Aussie Dollar exchange rate I would expect to see the next potential market movement to come after the vote this evening, with the result expected to be released shortly after the vote.

AUD exchange rates have been influenced over the past week and a half by the concerns that the US-China trade war tensions could resurface, as China is Australia’s main trading partner. Those of our readers planning a GBP/AUD trade should follow this matter as it’s the main driver of AUD value at the moment.

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.