Tag Archives: Aussie dollar

GBP/AUD Forecast Difficult to Judge (Ben Fletcher)

Sterling dropped today after inflation defied expectations and held at the previous level of 2.6%. There was hopes that inflation may rise up to 2.7% however it didn’t happen and the markets responded with Sterling losing a cent against the Australian Dollar. Whilst Sterling has dropped today, in my opinion it didn’t quite go as far as I thought it might. This is due to some of the concerns with the Australian economy which does suggests the Aussie strength is dwindling.

The number of new builds expected in the next few years in Australia looks set to fall which has an effect on the price of housing and the amount of jobs across the country. There is low inflation levels in Australia and despite the Reserve Bank of Australia suggesting they may increase interest rates to 3.5% in the next few years, they wont before inflation rises. This suggests that whilst the GBP/AUD is currently sitting around the mid 1.60’s if good news for Sterling becomes apparent the rate could rise sharply to 1.70.

Unemployment Tomorrow

In the short term there will be Unemployment Data in the early hours of Thursday morning which is expected to show July’s rate has stayed the same as June, however any deviation from this could have a positive or negative effect on rate depending on the direction. Currently with Sterling struggling and on a negative streak I do think there is more chance of the rate falling than going up.

If you do have a question with regards to my forecast or have a different question please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me Ben Fletcher at brf@currencies.co.uk

 

Aussie slightly lower on RBA comments, where next for GBPAUD exchange rates?

The Australian dollar is a little lower this morning as the Reserve Bank of Australia Governor Philip Lowe reiterated that Unemployment was a key factor in any decision to raise interest rates and that for now rates would ‘remain steady’ at 1.5%. The raising and lowering of interest rates is a huge factor driving exchange rates and these comments alongside global events have seen the Aussie a little softer. If you are buying or selling Australian dollars then making some plans around future trends is key to securing the best rates.

Global events are always something to bear in mind with the Australian dollar but more so at present. With the Australian dollar benefiting and suffering as global sentiments on markets rise and fall the latest developments with North Korea and the US dollar are key. Essentially the US dollar is rising because investors are concerned about the prospect of a nuclear war. As the Australian dollar is used by investors because of its high yield (higher interest rates) in times of uncertainty likes this investors will pull their funds and look to invest in ‘safer’ shores, eg the US dollar.

At present this is not overly pronounced, we are only talking a couple of cents off the more recent levels. However any deterioration in the North Korean situation could easily the AUD lose value sharply. There is some important US economic data due at 13.30 UK time today which might lead to some swings on USD/AUD which would in turn influence GBPAUD exchange rates.

All in all I expect the pound to continue to struggle but in the absence of any new fresh bad news and a slightly more dovish RBA, we could see GBPAUD gently drift higher. Next week’s UK Inflation data, Retail Sales, Unemployment and then Australia’s Unemployment data could all be market movers. If you have a transfer now or in 6 months, making some plans around up coming events is key to getting the most for your money.

Whether on amounts of 10,000 GBP or multi-millions, if you have a transfer we can secure preferential commercial rates of exchange and offer practical assistance with the timing of when to lock in a rate.

Thank you for reading and for more information please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

A warning from the RBA

The Australian dollar has been the fourth best performing currency out of the top 10 most traded currencies and is 10.2% stonger on average against all of the major currencies since that start of the year. However Governor of the Reserve Bank of Australia announced last week that he believes the Australian dollar is overvalued and it’s only a matter of time until this starts to have a negative impact on the Australian economy. The Governor beleieves  GDP growth, inflation could start to fall and jobs might be at risk.

Friday morning the Reserve Bank of Australia released their latest monetary policy statement and the central bank reacted to the overvalued Australian dollar by cutting growth forecasts up until the end of the year by 0.5%. However the Reserve Bank of Australia announced that they are optimistic that economic growth would recover over the next 12 months as long as the currency did not continue to strengthen further.

For clients that are selling Australian dollars to buy pounds, I don’t believe the RBA are in the position to cut interest rates in a bid to devalue the Australian dollar however I expect at any opportunity the Governor of the RBA will talk down the currency in a bid to devalue it, a common practice known as jawboning. As exchange rates have improved 10 cents since the start of June and with such an uncertain time ahead this spike in the market may be worth taking advantage of.

If you are trading GBPAUD this week, month or year I would recommend emailing me with the the reason for the transfer (company goods, property purchase) and your timescales and I will response with the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

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

Australian Dollar remains strong, but Aussie Dollar sellers should be wary of the RBA’s attempts to weaken it! (Joseph Wright)

In the last month alone the Aussie Dollar has gained an impressive 4% against the US Dollar, and the currency has also manged to find itself trading at the top end of it’s post-Brexit levels against the Pound.

It has also become clear that the Reserve Bank of Australia is skeptical to make amendments to the current interest rate through fear of affecting the housing market. Property prices are overheating down under, especially in the east-coast and a change could create a dramatic impact so I believe there won’t be a change for a while.

The Pound has been underperforming recently which has accentuated the losses for the GBP to AUD rate, and although I think there’s a chance we could see the RBA attempt to talk down the Aussie Dollar and economy in order to keep the currency from becoming even more overvalued, I would rule out a move back down the lowest levels since the Brexit vote of 1.59.

If you are planning on exchanging Aussie Dollars into Pounds and think the rate could become even further favourable, it may be worth looking into setting up a Limit Order in order to try and trade at a higher rate should it become available. I’ll be happy to discuss this in further detail should you wish to.

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 improves despite IMF downgrade, is this a sign that the Pound is oversold? (Joseph Wright)

I wrote last week about how some analysts as well as members of the Reserve Bank of Australia are becoming concerned that the Aussie Dollar is becoming overvalued and higher than it perhaps should be, and I believe we will continue to hear similar commentary in the upcoming months.

Earlier in the year the Pound to Aussie rate hit the mid 1.70’s whereas the pair are now trading closer to 1.50 than 1.60. Since the Brexit the lowest the pair have fallen to is to a mid-market level of 1.59 so i don’t think we can rule out another move to these low levels as we don’t require the GBP/AUD pair to do something they haven’t in recent history.

In the early hours of this morning the Pound started off on the back foot after the International Monetary Fund (IMF) downgraded both the UK and the US growth forecasts for the rest of this year.

Throughout the day though the Pound has climbed, not just against the Aussie but across the board as the Pound as gained against all major currency pairs today.

Despite this boost I think that we could see the Pound trade at lower levels, especially if the UK inflation rate continues to under-perform and the likelihood of a rate hike from the Bank of England continues to dwindle.

If you have a 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.

Reserve Bank of Australia appear unhappy with ‘overvalued’ Australian Dollar, will they take action? (Joseph Wright)

The Aussie Dollar has not only gained a substantial amount of value against the Pound in recent months, but also against most other major currency pairs.

With the Reserve Bank of Australia (RBA) already suggesting that there will be no further interest rate changes this year, they now have the issue of an overvalued currency which is a negative for an economy like Australia’s due to it being so heavily export driven.

The reason the RBA is unlikely to amend the interest rate is due to fears of a heavy impact on the already overheating housing market, as making mortgages easier to come by would most likely cause even further issues for house prices down under and especially on the East coast.

The Australian Dollar is now this year’s best-performing major currency so those looking to exchange AUD into another currency should bear this in mind.

Moving forward I think there’s a chance that we could see members of the RBA attempt to jawbone the currency as they will be looking to keep Aussie exports competitive.

The Pound is coming under pressure as Brexit negotiations take place this week in Brussels, and I think there is always the chance of a update on these which could move the markets.

If you have a 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 rise back above 1.70??

The expectation for GBPAUD exchange rate is rather mixed with the pound really struggling to make much headway following a tough week. Tuesday saw GBPAUD drop as members of the Bank of England confirmed they will not be so positive about raising interest rates. The overall belief the pound would rise if the Bank of England raise interest rates has been supporting the pound but this is now looking less likely. The Australian dollar has also been benefiting and rising because the US Federal Reserve have been slightly move dovish (soft) in their approach towards raising interest rates.

If you are buying Australian dollars with pounds there is a belief we could see 1.70 but I think it is more likely the GBPAUD rate will actually drift lower. This is because there are so many negative factors surrounding the pound and I believe market conditions are much more supportive for the Australian dollar to rise. This largely stems from the fact the Australian dollar is a commodity currency and will appreciate in value when investors seek a higher return.

If you need to buy Australian dollars with pounds the short term forecast is not looking so good. Trading conditions seem to favour sterling slipping, I mean just what would actually lead to the pound rising? Uncertainty over the Brexit and the UK economy indicates to me the pound will remain on the back foot. I also believe the Australian dollar will retain much of its strength in this current climate.

If you have a transfer to make then getting all the information available and tracking the latest trends is key to helping maximise your transfer. A 1 cent improvement on a £200,000 transfer buying Australian dollars could achieve you an extra 2000 Australian dollars!

For more information at no cost or obligation please speak to me Jonathan by emailing jmw@currencies.co.uk. We are expecting some really interesting movements on the GBPAUD rates, of course it won’t be just downward, there will be spikes to take advantage but you need to be prepared! This is what we can help you to monitor and achieve.

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

 

 

What factors could cause the Aussie Dollar to weaken? (Joseph Wright)

Last week the Pound found itself under pressure after a raft of bad data out of the UK has resulted in concerns in a slowing down of the UK economy.

Data showed slowdowns in the manufacturing, construction and importantly the services sector and although the readings were in line with previous readings when GDP is running at 0.4%, the economy is slowing as we enter the 3rd quarter which is a negative sign for those hoping the Pound will climb as the year progresses.

The Reserve Bank of Australia disappointed Aussie Dollar bulls and those hoping the Aussie Dollar will climb last week. Many had hoped for indications of future interest rate hikes from the RBA but these comments never came, with many analysts now confident of a rate hike this year.

The price of Iron Ore has firmed up recently offering AUD some support, but the mixed messages the markets are receiving regarding China’s economy (and whether or not the figures they release are 100% truthful) is likely to weigh on the Aussie Dollars value.

The issues surrounding the housing market overheating in parts of Australia is also likely to be a talking point, and it’s quick market movements that we can help our clients take advantage of in a number of different ways, so feel free to get in touch if you wish to discuss this in further detail.

If you have a 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 the Bank of England and Reserve Bank of Australia could impact GBPAUD exchange rates (Dayle Littlejohn)

For people that are reading this website for the first time as they need to purchase a substantial amount of Australian dollars for a business related matter or a property purchase it’s is important to understand that interest rates have a major impact on the currencies value.

Earlier this week the Reserve Bank of Australia’s minutes confirmed the RBA are unlikely to hike rates anytime soon. This was a surprise as the Governor of the RBA gave a hawkish press conference last week and many economists had been speculating that Australia could follow in the US footsteps.

It was important to note the RBA did confirm it is unlikely rates would be cut further as, more liquidity in the housing market would have a detrimental impact on the Australian dollar longer term.

The message the RBA gave earlier this week is slightly different to the Bank of England’s. Inflation levels have risen above the BoE 2% target and members of the Bank of England are now calling for an interest rate hike. Nothing has been confirmed however speculation is rising and a hike looks likely towards the end of the year or early 2018.

Therefore looking ahead the pound could trend higher against the Australian dollar if we only looked at interest rates, however there are many factors that influence exchange rates. For example Brexit negotiations are on going and if these negotiations grind to a halt which I think is likely we could see substantial falls in the pounds value.

When converting GBPAUD exchange rates it is important to understand political events are having more of an impact than economic data therefore it is very difficult to predict the future. My job is to outline the options to clients with the potential upcoming economic events, and the client makes the decision of when to convert.

If you are buying or selling Australian dollars and would like to know your options and have access to fantastic exchange rates feel free to email me on

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

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

 

Political uncertainty plagues the Pound (Daniel Johnson)

Theresa May’s call for a snap election has caused severe pound weakness. Political uncertainty historically weakens the currency in question and this is definitely the main catalyst for Sterling weakness at present. Many are uncertain how the Conservative- DUP coalition will pan out and the majority of the general public are furious with the £1bn of tax payers money to be handed to the DUP in return for their votes.

The PM’s job is on the line and until we have a a stable government the pound has little chance of a recovery. As usual politicians seem to be far too concerned  with their own agenda rather than  trying to benefit the country. By ousting the  PM I would expect investors to deem this as yet more uncertainty in regards to the political situation and the pound to fall further.

Let us also not forget the Brexit negotiations, this will be a key factor in GBP/AUD buoyancy levels moving forward. Despite the rumors talks could be elongated, it is important to remember the scale of UK imports, particularly  for German cars. It will be detrimental to all involved to play hard ball with the UK.

I am still of the opinion the pound is undervalued against the Aussie. Let us remember it was not too long ago GBP/AUD sat above 2.20. Australia’s heavy reliance on the Chinese could prove to be a problem. Growth, although still impressive is still slowing in China and this has repercussions on the Australian economy. Keep a close eye on Iron ore prices, this is the largest export for Australia and has the power to influence Australian dollar value.

There is also the housing price concern, with over inflated house prices in high wage areas. Some consider this to be unsustainable, although if foreign investors are still prepared to pay the these prices it may not be the case. We only have to look at London as an example.

Overall, although Aussie dollar sellers may see further gains short term. I would not necessarily procrastinate. It is an incredible time to purchase Sterling.

If you have a large currency transfer to perform in the coming days, weeks or months then I will be happy to speak to you directly as I will be willing to help you both with trying to time a transaction and getting you the best possible rate when you do come to trade. A small improvement in a rate of exchange can make a significant difference, so for the sake of taking a few minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on dcj@currencies.co.uk and I will endeavor to get back to you as quickly as possible. Thank you for reading.