Tag Archives: australian dollar forecast

GBP to AUD Rate Gains Ahead of Australian Unemployment

The GBP to AUD interbank exchange rate has gained in the last day, in part ahead of Australia’s unemployment statistics for December, released this Thursday 23rd at 00.30 GMT.

It’s forecast that joblessness Down Under rose by 0.1% last month, up to 5.3%, while Australian companies are predicted to have created just 15,000 new positions, from November’s 39,900 gains.

If these forecasts are accurate, they would suggest that Australia’s job market has slowed, further away from the Reserve Bank of Australia’s (RBA) target jobless rate of 4.5%.

This, combined with Australia’s ongoing bush fires, may convince the RBA to cut interest rates below their current 0.75%, when the central bank next meets on February 4th. Historically, lower interest rates tend to weaken the value of the AUD.

Looking Ahead


Another factor why the sterling vs Australian dollar interbank exchange rate has gained, is because there have been reports of a new coronavirus in China, Australia’s closest trading partner.

Seemingly, over 200 people in the southern city of Wuhan have been struck by a similar type of virus to the SARS that killed 700 people in 2003.

This has weakened the Australian dollar, because if China imposes a quarantine, and bans China’s citizens from travelling abroad, then fewer Chinese tourists could visit Australia this year. Chinese visits are a significant driver of Australia’s tourist industry.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me, Daniel Johnson directly at dcj@currencies.co.uk.

GBP to AUD weakens as Javid signals UK/EU trade divergence

The GBP to AUD interbank exchange rate has fallen over the weekend, in part because UK Chancellor of The Exchequer, Savid Javid, has said that he expects the UK and EU to diverge, in the upcoming trade talks.

Speaking to the Financial Times, Mr. Javid said: “There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union – and we will do this by the end of the year.”

This has weakened sterling, because up until now, it was hoped that the UK and EU would retain as close regulatory alignment as possible, to maximise imports and exports between the two, and foster economic growth.

US-China Trade Deal


last week, the USA and China finally signed their “first phase” trade pact.

Beijing has promised to buy billions worth of US farm and manufacturing goods, while Washington has stopped calling China a currency manipulator, among other things. Also, the two countries have avoided ratcheting up their tariffs on each other.

This has benefited the Australian dollar, because China is Australia’s closest export partner, and the antipodean nation also trades with the USA. So when there’s good Chinese economic news, this tends to benefit the AUD.

Looking Ahead

Turning to this week, it’s a bumper week for UK and Australian economic data.

On Thursday 23rd at 00.30 GMT, we’ll learn Australia’s unemployment statistics for December, which are forecast to rise by 0.1%, to 5.3%.

The UK’s “flash” PMIs (Purchasing Managers’ Indices) for this month will go live on Friday 24th at 09.30. Depending on whether the data show a UK post-election bounce or not, this may convince the Bank of England (BoE) to maintain or cut interest rates from their current 0.75%.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you.teh@currencies.co.uk

GBP vs AUD Strengthens as Markets Unsure If BoE Will Cut Rates

Sterling has strengthened versus the Australian dollar, in part because markets are increasingly unsure if the Bank of England (BoE) will cut UK interest rates, when the central bank next convenes on January 30th.

Since late last week, investors have been raising the odds that the BoE may cut borrowing costs from 0.75% back to their all-time low of 0.5%. Although now, markets are also considering the possibility that the central bank might stay its hand.

Pound Strengthens on Signs of “Green Shoots”, Ahead of Next Week’s PMIs


There are signs of economic “green shoots” in the UK, following the Conservative Party’s decisive election win last month.

It’s thought that, for UK businesses, this has provided a degree of certainty both about the UK’s economic outlook, and regarding Brexit. As such, CEOs are beginning to raise their investment intentions.

For example, an Institute of Directors survey this week has found that, at the end of December, firms were their most confident about the outlook for the next year than any time since the survey started in January 2018.

In particular, the financial markets are waiting to see if there’s a post-election bounce, at next Friday 24th’s IHS Markit “flash” PMIs (Purchasing Managers’ Indices) for January 2020.

These will be the first clear indicator of whether activity has picked up in the UK’s key services and manufacturing industries, following the election.

Hence, depending on whether the data are upbeat or not, the BoE may be more or less likely to cut interest rates toward the end of this month. In turn, this could affect the pound.

Australian Dollar Could Be Affected, as RBA May Cut in Early February

Meanwhile, looking Down Under, investors continue to weigh the possibility that the Reserve Bank of Australia (RBA) will cut interest rates, when it next meets on February 4th.

If so, this would be to support the economy, during the ongoing bush fires. Were the RBA to cut borrowing costs from 0.75% down to 0.5%, their all-time low, this would traditionally weaken the Australian dollar.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk

Positive Turnaround for the AUD Eases off RBA Cuts in February as GBP Awaits Economic Data

The Australian Dollar has taken a turn for the better as the new week gets underway. Recent performances from AUD have been lacklustre and paired with the ongoing bushfires that engulf the countries resources, Australia did not start the year on the front foot. However, it now appears that AUD could be getting back on the right track as both retail sales figures and global factors come in to support the currency. Meanwhile, GBP awaits important data which is due to be released this week. The first will come today in the form of November’s GDP number. Investors will be hoping for positive data as the BoE upped the ante on the potential of a rate cut for GBP in the future, but the Sterling isn’t priced for a rate cut any time soon.

AUD Picks Itself out of Poor Performing Run Thanks to Retails Sales Figures


AUD has been under pressure lately, both from poor economic data and the bushfires which are ongoing throughout the country. The fires have taken a huge amount of the countries resources and have diverted these resources from their usual pathways which is likely to influence Australia’s economic figures. Luckily, AUD received positive news in the form of November’s retail sales. The figures showed a strong 0.9% rise for the month. This beat the expectations which were set at 0.4%. The data came as a broad-based rally in global stock and commodity markets, which usually has a beneficial supportive environment for AUD. The comeback from AUD saw the GBP/AUD exchange rate slip as AUD edged up on GBP. However, recent reports have suggested that the economic impact of the bushfires has been significant enough to seriously consider an interest rate cut, this boosted the odds of a cut up to above 50%.

GBP Waits on Important Economic Data Which Could Settled the Score With AUD Rates


As AUD performed and edged up on GBP, the UK sat awaiting its run of important economic data which is set to be released this week. The first, which will come later today, is the November GDP figure. The consensus is expecting a second consecutive 0% change for November, which would see the UK economy across the halfway line of Q4 without making any growth at all. Furthermore, Wednesday and Friday will see the UK’s inflation and retail sales data released. These figures will be important for the strength of the GBP as Boris Johnson moves forward with his Brexit negotiations.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Pound to Australian Dollar Hits 3-Week High as RBA Forecast to Cut

The pound to Australian dollar interbank exchange rate stands at 1.9153 today at the time of writing. This is its highest in three weeks, or since December 18th.

By comparison, back on December 23rd, sterling was as low as 1.8669 versus the so-called Aussie dollar. So it’s since strengthened by 2.59%, or by almost five cents.

A partial explanation why the GBP to AUD interbank exchange rate has reached this three-week high today is because the Reserve Bank of Australia (RBA) is being increasingly tipped to cut interest rates, below their current 0.75%.

This is because bush fires continue to sweep Australia, destroying millions of acres and thousands of homes. So to try and support Australia’s economy during this natural disaster, the RBA may cut borrowing costs, to reduce the cost of a loan for Australian businesses and households.

The RBA makes its next interest rate decision on February 4th 2020, and an interest rate cut would traditionally weaken the Australian dollar.

Johnson and Von Der Leyen to Begin UK/EU Trade Talks


Turning to today, sterling might be affected, because UK Prime Minister (PM) Boris Johnson will meet new European Commission (EC) President Ursula Von Der Leyen in Downing Street, to begin the UK/EU future trade talks.

It’s thought that the two leaders’ conversation today will set the pace and tone of the negotiations to come over the next few months.

PM Johnson has set a deadline of the end of this year to finalise the trade talks, while President Der Leyen thinks that they may have to be extended, especially as such trade talks normally take years to finalise.

In particular, if the discussions today goes smoothly, or otherwise, this could affect the value of sterling.

Australia’s Building Permits Rise, Trade Balance Due, Could Influence AUD


Turning to the economic calendar, yesterday we learnt that Australia’s building permits surprisingly rose by 11.2% in November, well above forecasts for 2%, which could impact the Australian dollar’s value.

Tomorrow, we’ll learn Australia’s trade balance statistics for November, forecast at AU$5,915 million, while on Friday, Australia’s retail sales data for November goes public too, predicted at 0.4%. These releases could be worth watching, for their effect on the GBP to AUD interbank exchange rate.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you.teh@currencies.co.uk

GBP to AUD Strengthens on Talk of RBA Interest Rate Cut in February

The pound to Australian dollar interbank exchange rate stands at 1.9139 today. This is its highest in three weeks, or since December 18th 2019.

By contrast, back on December 23rd, sterling was as weak as 1.8669 versus the so-called Aussie. So it’s since strengthened by 2.51%, or by over 4.5 cents.

One partial explanation why sterling’s value versus the Australian dollar on the interbank market has strengthened, is because the Reserve Bank of Australia (RBA) is being tipped to cut interest rates in February, below their current 0.75%.

This is because Australia is experiencing intense bush fires, burning millions of hectares of land and destroying hundreds of homes.

As a result, the RBA looks likelier to reduce borrowing costs, to shore up Australia’s economy during this natural disaster. Traditionally, lower interest rates tend to weaken the value of the Australian dollar.

Sterling Strengthens as UK Services PMI for December Upgraded


The GBP to AUD interbank exchange rate has risen, in part because the UK’s services sector performed better than previously thought in December.

According to watchdog IHS Markit’s revised PMI (Purchasing Managers’ Index) yesterday, UK services activity was lifted to 50.0, from the previous “flash” estimate of 49.0.

This 50.0 is exactly the figure that separates economic growth from expansion, so tells us that UK services stagnated in December, rather than shrinking. This has lifted sterling’s value versus the Australian dollar.

GBP to AUD Might Be Affected by UK and Australian Economic Data


Turning to the rest of this week, the sterling vs Australian dollar interbank exchange rate could be affected, both by UK and Australian economic releases.

In the UK, the British Retail Consortium (BRC) releases its UK retail sales figures for December this Thursday 9th January, at 00.01 GMT. In November, UK retail sales fell by 4.9%, so we’ll see if sales improved over Christmas, which might affect sterling.

Meanwhile, Australia’s economic data includes building permits for November, released on Wednesday 8th at 00.30 GMT and forecast at 0.4%. Also, Australia’s trade balance for November is made public on Thursday 9th at 00.30 GMT, and predicted at AU6,100 million.

If these data exceed or disappoint expectations, it may affect the Australian dollar, alongside the developing bush fires.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Australian Dollar on the Front Foot Heading Into 2020 After Overcoming USD Losses and 2019 Downtrend

The Australian Dollar had a rocky 2019, with three interest rate cuts from the Reserve Bank of Australia (RBA) which left the rate sitting at 0.75%. However, the latter of the year appears to have turned positive for the currency. As the last day of the year approached, the AUD saw itself overcome the downtrend it was on and overturned the losses it experienced against the USD in 2019. The US-China deal is also due to be signed which lends the AUD more support as a currently weaker USD allows the AUD to edge in their exchange rate cross-over.

AUD Overturns 2019 USD losses

The Australian Dollar overturned its 2019 losses against the USD as the end of the year approached. The Aussie rose 1.3% against the USD last week and rose by 3.67% for the month of December. This allowed the AUD to chop its 2019 losses down to -0.59% ahead of the year-end. Economists are suggesting that the AUD is performing well, but still has some way to go to catch up to the Pound Sterling which gained 0.48% in the GBP/AUD exchange rate last week and is still up some 3.7% for the whole year.

Positive Economic Data Has Helped out the Australian Dollar

A recent stream of positive economic data has offered the Australian economy a helping hand to reach the finish line of the year. Most notably, the November jobs data which saw a fall in the unemployment rate across Australia and a creation of 39.9k new jobs for the month. With positive news coming from the economic front, the chances of an RBA rate cut for February are beginning to lessen. This is positive news for investors as a rate cut would see it drop to around 0.5% and the AUD would likely lose strength in the global market.

Us-China Deal Set to Be Signed, Aud Set to Rally on Completion of ‘Phase One’

Vice Premier Lui He is set to travel to Washington on Saturday in order to sign the ‘phase one’ deal between China and the US. Upon completion of the deal, the AUD will be poised t rally as it will benefit from an uplift in the Chinese economy as US tariffs are lifted on the country. The global economy will also benefit from this deal so investors around the world are keen to see the deal go through.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk

Australian Dollar Receives Support From US-China Deal Signing Whilst Awaiting Manufacturing Data

AUD received further support this week from the US-China deal which is set to be signed soon by both parties. The deal looks like a completed one and when pen meets paper, the global economy looks poised to rise, of which AUD will surely benefit. However, some analysts are suggesting that the AUD is lacking drive as investors adjust to 2020 growth and trade outlooks. The RBA’s rate cut decisions for 2020 are still weighing heavy on the Aussie Dollar. Investors will be hoping for positive news from this Thursday’s upcoming manufacturing data PMIs.

AUD Hoping for the Signing Ceremony as Soon as Possible for the US-China Deal


For months the trade deal between the US and China has dominated headlines in the trading world, and rightly so as the global economy is likely to rise bringing with it many in the market like AUD who has close trade ties with China. Both US President Trump and Chinese officials have confirmed that a ‘Phase One’ deal has been agreed on and that the deal will be signed in due course. Investors are hoping that this signing process will happen sooner than later to start the New Year off in good stead.

Upcoming Manufacturing PMIs Will Determine AUD’s Next Directional Shift


There is little data to be released before the New Year arrives, which means that today is likely to be a slower day for the Aussie Dollar. But this Thursday will see the release of the Australian manufacturing PMIs for the month of December. Investors will be hoping that the figure will build upon the previous months number and boost AUD with a positive turnout. Should the figures beat projections, then AUD will likely rise and edge against its major rivals like GBP.

RBA Interest Rate Decision Weighs Heavy on AUD Going Forward


The RBA’s recent dovish stance has weighed heavy on AUD in recent weeks. With their final meeting of 2019 opening the door to further cuts in 2020, AUD fell accordingly. Investors will be hoping that Thursday’s manufacturing data will be positive enough to alleviate some tensions from the RBA’s potential cuts which have investors worried.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Economists Predict a Break AUD Whilst GBP Softens After Hectic Year

News for the upcoming week is suggesting that the Australian Dollar is primed for a break to a fresh 22-week high, but this momentum has been slowed mainly due to the fading liquidity. The uncertainties surrounding interest rates for the AUD in 2020 are still present and causing concern for some investors. Meanwhile, for the GBP, it has seen a softening after a rollercoaster year that has been dominated by the Brexit news and the General Election. With the GE over and an EU withdrawal plan being accepted in parliament, the GBP is beginning to settle down as its future becomes clearer to the markets.

AUD Looks to Break to 22-Week High but Uncertainties Keep Investors on Their Toes


AUD remained almost flat against the USD, settling at around 0.6920 which was almost unchanged from Monday’s closing rate. During the London trading hours, the AUD/USD rate was observed to be trading at a level of 0.6925 and 0.6911 versus the US Dollar. Despite positive trading, negative news has surrounded the AUD of late with a lower-than-expected economy growth of 0.4% in Q3 for 2019 hitting investors recently. Pair this with the annual GDP growth rate standing at 1.7% and poor labour market statistics, the economy has been painted in a dire light and has led the central bank (RBA) to slash interest rates to a record low of 0.75% where it currently stands to end the year.

Going into the new year, the uncertainties surrounding the RBA’s decision on interest rate cuts are the main talking point. Economists are suggesting that a further cut could occur by mid-2020. The RBA left the door open for another cut in their December meeting minutes and this has investors worried. Previously the RBA had downplayed the suggestions of another cut and suggested that the outlook looked positive for AUD. Since then they retracted this statement and stated that they will meet in February to reassess the economy in order to finalise their rate decisions.

GBP Settles Down After Brexit and GE Madness


For GBP, its traders will have taken a well-earned rest over Christmas and Boxing Day as the UK markets closed. The year has been full of twists and turns for the GBP. Brexit uncertainties scared off potential investors whilst a Conservative majority optimism was often the driver of positivity throughout the General Election that wrapped up a few weeks ago. Economists have suggested that the GBP is now softening against EUR and USD as the outlook for the UK economy clears up after months of confusion.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Australian Dollar Rises as Employment Data Pleases RBA but Westpac Tips a 2020 Slowdown

Thursday saw the release of the employment data in Australia for the month of November. The figures were a shock fall in unemployment and as a result AUD rose. With the positive jobs data, some have suggested that this should take a load off the back of the RBA who have been edging towards a rate cut in early 2020. However, Westpac has now tipped investors to sell AUD as it eyes up a potential slowdown in 2020.

Jobs Data Performs, Brings up AUD with It


Yesterday was a positive day for the Australian Dollar, with a blowout jobs report being set on the table. The report showed that Australia’s economy had created 39.9k new jobs in November. This was a shock as the market had been anticipating a lesser increase of around 14.5k. This number was enough to drive the unemployment rate back down to 5.2% from the previous month of October’s 5.3%. Economists have welcomed this news with open arms as it may help ease concerns over a material slowdown to the labour market. But they also suggested that the RBA is aiming to see this figure drop to around 4.5% to provide more confidence that inflation will meet their target.

Performing Labour Market Has Been on the RBA’s Radar for the Future of Aussie Inflation


Economists have also taken note of Thursday’s data as the RBA previously flagged the labour market as one of the more important drivers in its stance on interest rates due to the effect that rising and falling employment figures can have on both wage growth and inflation statistics. The RBA has made three cash rate cuts in 2019 to attempt to lift the Aussie inflation to around the 2-3% target band. This has left the rate at 0.75%. Markets are betting that the RBA will likely cut rates again before April 2020 but with the RBA claiming that it may ‘sit on its hands’ before doing anything more and let the impact of the three previous cuts run their course first.

Westpac Tips Investors to Sell AUD


Whilst the AUD appears to be benefiting from the jobs data, Westpac have urged investors that the AUD is a sell. Representatives from Westpac have stated that the RBA is heading into 2020 with an over-optimistic view on Australia’s prospects. They highlighted the Q3 GDP report and partial data as key weaknesses to the AUD’s performance in 2019 and have stated that they expect the RBA to cut its rate down to 0.5% in early 2020 with a potential further cut down to 0.25% towards the end of the year. This has prompted Westpac to urge their clients to sell AUD/USD should the rate make its way back up to the 0.6950 level. This has left investors in the AUD a little uneasy as the RBA evidenced that this may be the case in their December policy meeting.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk