Tag Archives: australian dollar forecast

What factors could push the Pound to Aussie Dollar rate above 1.80 this year? (Joseph Wright)

The Pound to Aussie Dollar rate has been hovering just below the 1.80 mark for some time now, and although the GBP/AUD pair appear to have consolidated between 1.75 and 1.80 the pair are yet to properly test the 1.80 threshold.

AUD has been boosted in the early hours of this morning after the Reserve Bank of Australia’s minutes from their latest interest rate decision were announced. The RBA remains positive focusing on wage growth and a pick-up in the global economy moving forward which could lead to a rate hike from the RBA later in the year.

The topic of a rate hike in Australia is likely to be key moving forward as a number of other major economies have begun hiking rates now. AUD had previously benefited from having some of the highest interest rates available in the developed world but as other currencies now offer similar returns AUD has lost its appeal somewhat, and this issue is what could give the Pound a chance of gaining on AUD pushing the GBP/AUD above 1.80.

JP Morgan recently offered their opinion on the Aussie Dollars prospects and suggested the currency could fall as weaker commodity prices and monetary policy divergence put pressure on the AUD’s value.

There is an important data release out this morning from the UK in the form of Average Earnings data. This is key because the figure has disappointed recently and struggled to keep up with inflation levels which had previously made the BoE hesitant to hike interest rates. Should wages have increased over the past 3-months the chances of a rate hike are improved so I would expect to see a jump in the Pound’s value should this be the case.

Planning around events such as these can prove beneficial, so do feel to get in touch to discuss any upcoming transfers you plan on making.

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.

Factors effecting AUD (Daniel Johnson)

GBP/AUD – UK Retail Sales hurt Sterling

The Australian Dollar has strengthened against the Pound of late due to retail sales data coming in lower than expectations on Friday.
The Office for National Statistics (ONS) reveals the data for both year on year and month on month changes. Retail sales volume was up 1.6% year on year in January, an increase from the previous period 1.5%, but still well below the expected 2.5%.
The monthly growth rate for the quantity bought increased by 0.1% with declines across all main sectors except non-food stores. The results were buoyed by small rise in the purchase of sporting equipment due to the January gym rush this helped offset a fall food sales.
The results were taken as negative and Sterling has suffered as a result.
Richard Lim, Chief Executive of the research consultancy Retail Economics stated the following:
‘Following a wave of profit warning and job cut announcements, these figures confirm a terrible start to the year for retailers. Indeed the worst January since 2013’.

Interest Rate Forecast from the RBA

Philip Lowe, Governor of the Reserve Bank of Australia spoke on Friday and stated that a rate hike would be dependent on inflation rising and further falls in unemployment. He did however say that in regards to a change in monetary policy the RBA would ‘move interest rates up, rather than down’. Inflation is s ac concern down under but Lowe said a strengthening global economy would help put inflation back on the agenda. These statements did cause the Aussie to strengthen against the majority of major currencies. Personally I would be surprised to see a rate hike this year.

Iron Ore Crucial to the value of AUD

Iron Ore is Australia’s biggest export, predominantly to the Chinese. Fluctuations in the price of Iron Ore has a result on the Aussie. Metal Bulletin’s Iron Ore index climbed to the Highest level since January 2011 which bodes well for the Australian Dollar.
I am of the opinion the Pound is chronically undervalued at present. Brexit uncertainty is currently anchoring Sterling and will do until we have clarity on a Brexit deal.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

Inflation to influence GBPAUD exchange rates

Tomorrow morning the UK will release their latest inflation numbers and a slight fall is to be expected. Normally a slight fall would lead to a weakening pound however I expect a fall in inflation could strengthen the pounds position against the Australian dollar. My reasoning is that the Bank of England last week announced they expect inflation to fall and wage growth to rise, which will lead to an interest rate hike. The release is at 9.30am for further information in regards to the inflation release feel free to email me on drl@currencies.co.uk.

Later in the week (Wednesday) Boris Johnson is set to address the public in regards to Brexit. The aim of the speech is to unite remain and leave voters. Past history leads me to think that Mr Johnson may go off topic, especially if he is asked about Michel Barnier’s comments last week. For clients buying Australian dollars with pounds, I would be tempted to take advantage after the inflation numbers and not wait for Mr Johnson’s speech.

Economic data releases are thin for Australia until Thursday at 1.30am in the morning. Unemployment and employment change numbers are to be released. Unemployment numbers are set to fall to 5.3%, which is fantastic for the Australian economy. Employment change numbers are set to show a slight decline however I expect the Unemployment numbers to outweigh the employment change numbers, therefore I expect a positive morning for the Australian dollar.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

GBP/AUD remains at 1.77 after RBA opts to hold interest rates (Joseph Wright)

The Reserve Bank of Australia last night chose to keep interest rates unchanged, which was the expected outcome from economists leaving the currency markets unchanged at 1.5%.

This was the first chance the RBA had to make a change this year, and the base rate has remained at 1.5% for around a year and a half now. Many central banks have opted to hike interest rates in recent months, and should this continue it will result in the Australian interest rates being uncompetitive and therefore AUD weakness in my opinion.

Last year AUD benefited from offering one of the highest interest rates in the developed world. Investors are keen to hold funds in a high yielding currency but should AUD lose its competitive edge, it’s likely that money will be taken out of the Aussie Dollar and we’ll see it fall.

Politics also have the potential to move the GBP/AUD pair, especially at the moment as the European Union’s chief Brexit negotiator Michel Barnier is in London to discuss the UK’s plans and proposals for Brexit this week.

Those following the Pounds value should be aware of this and the potential it has to impact GBP exchange rates should any key comments be made, and do feel free to register your interest with me if you wish to be updated in the event of a major rate spike.

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.

Could we be headed for further AUD weakness? (Daniel Johnson)

RBA to keep interest rates on hold

Things do not bode well for the Australian Dollar at present. The Reserve Bank of Australia (RBA) have recently indicated that interest rates will be kept on hold for the foreseeable future. It was following Australian inflation data in the final quarter of 2017. There was a slight increase, but it did not meet the expectation of 2%. Some could deem this as positive, but the problem is due to the inconsistencies regionally.

Canberra, Melbourne and Sydney saw inflation hit over 2.1%, but if you look at Perth an area heavily involved in commodity exports inflation is struggling at 0.8%. This is definitely a cause for concern which is the reasoning behind keeping interest rates on hold.

The housing bubble created by those flocking to high wage growth areas is also a problem. The housing market remains strong in the east but is considerably down in the west according to the latest CPI figures.

With Australia highly dependent on raw material export to China it is important to keep an eye on Chinese data. We recently saw a fall in manufacturing data which has also caused Australian Dollar weakness.

GBP/AUD

GBP/AUD now sits above 1.75 which has been a resistance point of late. With the uncertainty surrounding Brexit talks if I was selling Sterling I would consider taking advantage of current levels. The last time we saw GBP/AUD near 1.80 there was a quick retraction possibly due to profit taking.

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 assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

GBP/AUD – Aussie struggles against Sterling (Dainel Johnson)

Can Sterling’s rally continue?

We have seen some very positive retail sales figures from down under of late, which had caused GBP/AUD to drop as low as 1.71. I am of the opinion the increase in retail sales was an anomaly due to Black Friday and the release of Apple’s iphone X. I would expect a significant drop on the next release.

Sterling has rebounded however, following a very optimistic outlook from Lord Jim O’Neill, economist and former chairman of Goldman Sachs. He has the firm belief that the UK economic back bone is strong and will recover from Brexit in a quick fashion. There has also been news from the Dutch and Spanish finance minsters that they are keen to have a close relationship with the UK post Brexit. Angela Merkel, the German Chancellor made similar comments, but this had a more significant effect on GBP/AUD as Germany is considered the engine room of the EU and they are heavily reliant on the UK for their imports.

The US Treasury secretary, Stephen Mnuchin also has stated the US will be forthcoming with a trade deal.  Be wary of thinking the pound will continue to make gains against the Aussie however with phase two of Brexit talks shortly to commence the pound could well take a hit. Talks are set to be elongated and problematic. Both Davis and Barnier are at logger heads on several issues and this does not bode well 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 16yrs. 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 hits best rate to buy Australian Dollars since early December (Tom Holian)

The Pound is now trading at its best rate to buy Australian Dollars in over a month as Sterling continues to improve against a whole host of currencies during the course of this week.

Sterling has hit pre-referendum highs against the US Dollar and is now trading at its best level to buy Euros in over nine months.

UK unemployment levels hit their best levels in over 40 years and are at their lowest levels since records began and this is one of the reasons for Sterling’s strength against the Australian Dollar.

There are still concerns that inflation is too high for the UK but Average Earnings also came out better than expected yesterday and this has also helped to increase the Pound’s value.

The two announcements yesterday were clearly very positive but tomorrow we have the latest GDP estimate for the UK and this could potentially put paid to Sterling’s recent rally against the Australian Dollar.

The over-riding factor for Sterling’s increase is that things are looking more positive concerning the topic of Brexit.

Both finance ministers from Spain and the Netherlands have suggested that they want to remain as close as possible to the UK in terms of ongoing trade and the overall tone looks to be one of togetherness rather than a ‘them and us’ situation.

Indeed, the Pound has increased by as much as 3% against the Australian Dollar in the last 4 weeks which is the difference of £3,400 on a currency transfer of AUD$200,000.

If you have a need to make a currency transfer in the near future when transferring Australian Dollars then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

 

Key economic data releases which will impact AUDGBP / GBPAUD exchange rates this week

For clients that converted Australian dollars into sterling or sterling into Australian dollars last week, both sets of clients were provided opportunity which many of clients took advantage of.

Thursday morning Retail Sales numbers were released for Australia and the numbers exceeded expectation which provided an extra cent for clients holding Australian dollars and purchasing sterling. Furthermore the tides turned Friday afternoon when reports were suggesting the Spanish and Dutch finance ministers had agreed that they seek the softest Brexit deal as possible, which is good news for the UK economy and consequently sterling.

This week the first key release which will impact GBPAUD exchange rates is the UK inflation numbers Tuesday morning. Forecasts are suggesting a slight rise to 3.2%. If this occurs more questions will be asked of the Bank of England, and consequently I expect this could provide a boost for the pound. However medium term forecasts are suggesting that inflation will drop over the next 6 months below 3% so I don’t expect a reaction from the central bank.

Later in the week (Thursday morning) Australia release Employment change, Unemployment rate and Participation rate numbers. Forecasts are suggesting all three releases are close to previous therefore if this is the case this could be a non event. However regular readers will be aware that Unemployment rate numbers can have a major impact on future monetary policy therefore keep a close eye on this release.

GBPAUD exchange rates have fluctuated 8 cents in 6 weeks, and with Brexit negotiations on going, many leading forecasters having a difference of opinion in regards to the future of the Australian dollar, I expect exchange rates will continue to fluctuate. Therefore if I were converting GBPAUD exchange rates I would look to use a limit order, which allows you to set a target rate and if the market spikes to that rate our automatic system will buy the currency on your behalf.

For more information on how I can help you save money on your currency transfer feel free to email me on drl@currencies.co.uk.

Retail Sales data strengthens the Australian Dollar (Daniel Johnson)

Will Retail Sales data continue to be positive?

We recently witnessed a sharp fall in retail sales down under. It was the sharpest fall in four years and alarm bells were ringing. There was a serious problem with housing affordability and wage growth. The housing bubble in Australia is common knowledge with foreign investors willing to pay the inflated house prices. The natives are struggling and are being forced to spend their money on necessities rather than luxury products.

Last month bucked the trend however. We saw a huge rise above the expectations of 0.4% to 1.2% in retail sales. The question is will this growth continue?

I would say the answer to this is sadly no. Having looked into the situation in more detail it looks as though consumers’ obsession with Apple could be the cause along with a spending frenzy on Black Friday. The launch of the iPhone X was the phone that everyone wanted.

If I was an Australian Dollar seller I would be looking to take advantage of current levels. I am of the opinion the data release was an anomaly and I think we will see a sharp fall next month. Take into account that GBP/AUD hit 1.79 recently, so current levels are very favorable.

There is unemployment figures next Thursday and it will be interesting to see if the monster run of form can continue. The last figures were the most impressive since February 2013. I would not however hang on for this release if I was selling the Aussie, a lot can happen in a week.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.

Will GBP/AUD break out of its current trading range? (Joseph Wright)

The Pound to Australian Dollar exchange rate has remained in the early 1.70’s for a few weeks now, with Sterling sellers basing the best trades off of mid-market levels of 1.73.

Since spiking up to just under 1.80 the GBP/AUD pair has corrected and I think that trade levels just over 1.70 are a fairer value for the pair, so it will be interesting to see whether any data or news will have the capacity to push the pair out of the current range.

Sterling has been boosted in recent days as UK Prime Minister, Theresa May has reshuffled her cabinet in order to create one that better reflects the society that she serves. There haven’t been any major shocks and the main members such as Philip Hammond, Boris Johnson and David Davies have kept their high profile positions.

The next step for Brexit negotiations will be trade talks, of course an important stage which may have a big impact on the Pounds value so it will certainly be worth following the talks. The transitional deal and how the UK is expected to perform during and after this period is likely to impact Sterling exchange rates.

The UK economy overperformed last year when we consider the forecasts from the majority of financial institutions, and I think if the UK puts in another strong performance we can expect to see the Pound push over 1.80 at some stage during the year.

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.