Tag Archives: australian dollar forecast

GBP/AUD Rate Falls Following Suggestion That Hung Parliament Could Be at Risk from Election Polls

For the GBP, the start of Wednesday was not a promising one. Recent polls have been released to give an oversight of the current standings for the upcoming election. One particular trusted poll highlighted that there is a risk of a ‘hung parliament’ at the UK’s election later today. The GBP/AUD exchange rate now stands at around 1.92 at the time of writing.

Risk of Hung Parliament Causes Panic for the Investors of GBP

With the results from the trusted poll (YouGov) pointing towards a potential risk of a hung parliament, the strength of the GBP declined. A hung parliament refers to no single party holding a majority of seats. As a result of this, despite a government still being able to be formed, the likelihood of Brexit becoming finalised is decreased.

Markets are concerned that should a hung parliament occur that the UK may miss yet another Brexit deadline (31st January 2020). If this is the case, the UK could run the risk of exiting the EU without a deal or a “No Deal” or once more having to ask Brussels for a further extension. With the risk of all or any of the above, the Sterling sunk as uncertainty has once again got the better of the GBP.

House Prices Rise for Australia but Consumer Confidence Falls

For the AUD, it will likely welcome the slide from the GBP in the interlinking exchange rates between the two. With mixed data being released for Australia this week, positive news broke that house prices rose by 2.4% in the third quarter, from July to September. This figure was above forecasts and NAB’s business conditions index increased by 2 points in November to a figure of 4. However, everything isn’t bright for the AUD as the release of Westpac’s consumer confidence index fell to minus 1.9% this month, which was less than November’s 4.5%. This figure set alarm bells ringing that Australia’s economy is still not home and dry and that potential risks are still there for the future of the country’s economy.

For the rest of the week, the major player will be the UK’s general election which takes place today. The outcome will likely be announced early Friday morning. The outcome of this election is likely to shake things up for both the GBP and its rival currencies. Investors will be hoping for a Tory majority, but with YouGov polls suggesting a hung parliament may be on the cards, the answer is certainly not clear as to who will come out triumphant.

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/AUD Exchange Rate Creeps Closer Despite Weak UK Growth

Coming into the middle of the week, the GBP/AUD exchange rate has edged higher even with poor UK growth data that was released yesterday. The pairing was trading at around AU$1.9340 ahead of Thursday’s election. The markets are remaining optimistic that the Conservative party will retain power in government and that Brexit will be seen through to start the year.

Pound Sterling Rises in Strength Ahead of Election

Tuesday saw the rise of GBP, in doing so it clung to previous gains. This was a little surprise as the UK’s growth data was revealed which showed the UK economy growing at the slowest rate in seven years to begin the start of the fourth and final quarter of the year. In the three months that led up to October, the economic growth within the UK stalled, and the annual GDP rose by a mere 0.7%. This weak growth was the weakest rate of expansion since March 2012. Economists have described the data batch as a negative view of the recent inactivity levels coming off the back of a flat GDP reading for the month of October.

Outlook for the AUD Looks Bleak, This Is Likely to Weigh on the Already Struggling Currency

For the AUD, it slumped against the Pound Sterling on Tuesday after a National Australia Bank (NAB) survey revealed a disappointing outlook for the Australian economy. The NAB reported that business conditions remained unchanged, whilst confidence slipped. Economists for the NAB also stated that the conditions were below average, and confidence is also lacking. Added to this, there is the risk that employment growth may slow, and investment will remain weak even with a spill over demand from public sector spending and stability in the mining sector. The positivity that was observed in the previous months appears to have now faded and therefore the NAB is not expecting a significant recovery being achieved any time soon.

For the GBP/AUD exchange rate, AUD could extend its losses against GBP. The Westpac consumer confidence data could show a further slide which would mean a decline for the ‘Aussie’. For GBP, its growth relies on confidence that the Tory party will prevail in Thursday’s election. If polls continue to reveal Boris Johnson as favourite, then GBP will likely rise higher. YouGov’s update is expected before the election and should this show a Conservative majority the GBP will likely extend its lead on AUD and other major currencies.

If you would like to learn more about current GBP/AUD exchange rate and future events that may influence them, 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.

Three Year High for GBP/AUD Exchange Rate as Confidence in Conservative Majority Rises

The GBP/AUD exchange rate rallied on Monday following a high investor confidence in the Tories securing a majority in Thursday’s General Election.

Confidence in Tory Majority Rises over the Weekend Giving a Boost to the GBP

Over the weekend, opinion polls showed further support for the Conservatives who now are edging the Labour party by around 10 percentage points. Also, yesterday was the release of Survation’s poll which showed the gap between the two front-running parties was 14 points. This may sound positive to the market and investors who are hoping for a Tory majority and a carry-through of Brexit going into 2020, but experts have cause for concern. They have noted that a wide spread has been observed concerning the Tory lead over Labour which has spanned from 6 points to 15 points. They warn that this seems encouraging, but should the figures show around the 6-7pts territory that a hung parliament will occur – which would be disastrous for the markets Brexit plans.

Trade Tariffs Could Weigh on the Australian Dollar

The AUD is still being held at the mercy of the US-China trade talks. Economists are predicting tensions to rise ahead of the US’s new tariffs on Chinese goods. Towards the latter end of the week, the US is expected to hit Chinese goods with added tariffs. US President Donald Trump mentioned this recently but noted that something could happen on the 15th December but for now the US is enjoying promising discussions with China about the trade talks. Reports out of China suggest that Beijing was keen to secure a deal with the US as soon as possible. Despite both parties still appearing to be optimistic towards a deal being reached, AUD has slumped following weak Chinese export data in November as exports to the US were down by 23%, which sees the twelfth consecutive monthly decline for these figures.

AUD is still waiting on RBA’s governor Philip Lowe to deliver his speech on the Aussie economy and to address last weeks weak economic data. Should his tone be dovish, AUD is likely to slump against GBP. For GBP, the GDP data for the UK is set to be released later today, should these figures be below expectation that could weigh on GBP.

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/AUD Slides Ahead of This Week’s General Election Whilst Aussie Is on the Rise

This week will be an important one, not only for the GBP but all of the major currencies as the UK’s General Election takes place. The outcome is likely to have a huge knock-on effect for all currencies that trade with the GBP. Meanwhile, the AUD is riding a positive wave of late, positive economic data from China has seen the Aussie Dollar receive an upswing of support.

GBP/AUD Declines Ahead of This Week’s UK Election but Looks to Rally on Tory Majority Chances

The GBP appears to be in decline ahead of the general election this Thursday. The contributing factors last week were political and economic uncertainty which weighed on the manufacturing sector’s ongoing downturn. There were moments of optimism which drove the Pound back up as a Tory majority looked more likely with the release of opinion polls, a Tory majority would ensure that Brexit gets seen through and this buoyed the Pound throughout the week.

This Tuesday, the UK manufacturing and industrial production figures are due to be released. If they continue the downward pattern that has been observed of late then the GBP’s gains are likely to be limited. Added to this, October’s GDP data is expected, should this fall too then the Pound’s outlook will be flat. Attention will be turned to Thursday’s election and if Boris Johnson’s Conservatives win a majority then the GBP/AUD exchange rate is likely to rise.

Australian Dollar Made Good Progress Last Week but Could Begin to Decline with a Dovish RBA

The AUD made clear gains last week as the Chinese manufacturing data saw the largest expansion since December 2016. This gave the AUD a boost as it’s close links with the Chinese economy meant that this was mutually positive for both countries. However, the AUD is predicted to slump against the Pound following the upcoming speech from RBA governor Philip Lowe. Economists are noting that should his speech be given with an overly dovish tone about the AUD outlook and the weak GDP growth, then the currency is likely to fall. Westpac’s consumer confidence data is also set to be released on Tuesday, should the confidence slide further, the AUD will likely decline with it.

For the upcoming week the main topic will be the outcome of the UK elections, this is likely to be on every nations radar as the outcome will cause ripples in the trading world whatever the outcome. The Aussie Dollar will be hoping for positive data over the week and a pick up in the US-China talks.

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.

The Pound Sterling Edges on the Australian Dollar as the Exchange Rate Hits 3-Year Highs

The GBP reported gains on the Aussie Dollar yesterday. The GBP/AUD exchange rate hit a new three-year high, this is the highest since the EU referendum. With a soft AUD, the rallying looks to continue into 2020 for the GBP.

Upward Trend for the GBP Against the AUD

The GBP/AUD exchange rate hit a new three-year high just yesterday which was reported to be trading at 1.9214. The Sterling was rallying which the AUD fell soft. Experts have suggested that the Australian Dollar has been predicted to struggle throughout 2020 also. The GBP has been following a rising trend since late-July as expectations for Brexit have been building. The market hopes that Boris Johnson and the Conservative party can win a majority government in the General Election on the 12th of December which is less than a week away. Should the Tories retain power, the market expects them to be able to swiftly deliver Brexit in early 2020.

AUD Paves the Way for Other Currencies to Rally upon Its ‘Softness’

For the AUD, its recent poor performances have left it in a sorry state which many other currencies are taking advantage of and using it to rally in the exchange rate crosses. Australia reported a weaker than expected Q3 growth for 2019 which has led to the softening of the currency. Economists have suggested that the “sluggish” Q3 GDP data will undoubtedly lead to interest rate cuts in 2020. They also highlighted other issues for the Aussie economy such as consumption, household demand and ongoing slumps in the housing market.

Weak AUD Suggests Interest Rate Cuts Are Likely to Follow in 2020

Evidence for the Reserve Bank of Australia to cut interest rates is building up. The aforementioned poor Q3 GDP data has weighed heavy on the AUD and has also exacerbated the housing troubles through putting pressure on construction and investments. The RBA did opt to keep the interest rate at 0.75% this week and Governor Lowe announced a more optimistic tone for the AUD’s outlook which gave the AUD a boost in the markets, pushing rate cut expectations back.

But this optimism might not be enough for the AUD, a combination of a poor run in data, a slowing Chinese economy and commodity prices are extra burdens which may drag on the heels of the Australian Dollar. Therefore, many are predicting that rate cuts will be inevitable going into the new year to try and give the Aussie economy a lift.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

Australian Dollar Could Be Forced into QE Next Year, Whilst GDP Data Causes Sharp Drop for AUD

Reaching the latter end of the week, AUD is still facing may issues. Weak Q3 GDP data has weighed heavy on the currency. Whilst economists are calling for the RBA to make further interest rate cuts in order to relieve the Aussie economy. Meanwhile, GBP/AUD exchange rates look for new highs ahead of next weeks general election.

Disappointing Q3 GDP Data Weighs on AUD

AUD crashed following the release of the third-quarter GDP on Monday, the figures disappointed an already beaten market. This lead investors to bet on further interest rate cuts again from the Reserve Bank of Australia (RBA). The dovish news for Australia has been music to the GBP’s ears as it hones in on a new post-referendum high on the GBP/AUD exchange rate.

GBP/AUD Looks for New Post-Referendum High

For GBP, now seems to be the time to take advantage of the struggling Aussie economy, with AUD standing lower against all of its major rivals just yesterday morning. The highest recorded losses were against the election-transfixed GBP. The Pound rose higher than all of its rivals yesterday as it comes into close touching distance of a new post-referendum high. The key factor for GBP will of course be the decision of the General Election on the 12th December. For the currency markets, a Conservative majority is what they will be hoping for. A Tory majority would negate a threat of a ‘no deal’ Brexit as well as allowing the economy to progress from negotiation stage which has left the Bank of England fixed. Some are worrying that the opposition Labour party are rallying support which may see a surprise Labour rise on the day.

How the Weak Aussie GDP Data Will Affect the Outlook of AUD

With the news of the weak GDP data, AUD is set to suffer. Markets are particularly concerned with the performance of GDP data as it reflects the rising and falling economic demand which is crucial in regulating the inflation that the RBA has been coveting with its previous three interest rate cuts in 2019. Slower growth and weaker domestic demand should lead to lower inflation down the line, which is being used in support of urging the RBA to do more to meet its 2-3% inflation target. Experts are suggesting that the RBA will be forced into cutting the cash rate twice more in 2020, which would see the rate drop from 0.75% to around 0.25%.

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

A Vulnerable Pound Versus a Potential Rallying Australian Dollar for the Upcoming Week

With a fresh week ahead in the trading markets, the performances of the GBP and AUD have been highlighted and their outlooks cast. The GBP had been volatile lately and continues in this trend up until the General Election on the 12th December, but vulnerability is proposed ahead of finalised PMI’s for the UK. Meanwhile, the AUD has been in a troublesome state for a number of weeks, particularly with the breakdown of the US-China trade talks. But rumours suggest that the AUD could rally this week following the release of GDP data.

GDP Data Could Give AUD a Much Needed Lift in Exchange Rates

The AUD has faced challenges over the past few weeks, more recently US President Donald Trump recently caused upset to the US-China trade talks through his support to the protests in Hong Kong. The Chinese noted that the US should avoid getting involved in the conflict, but the President went against this wish – causing a breakdown in peace between the two countries.

However, the AUD’s luck may be on the rise now as expected GDP data is set be released this week. Predictions for this data have been positively rated and should this be the case then the AUD will likely receive a much-needed boost to it’s strength in the trading world as well as edging over competitors like the GBP.

GBP Could Fall Ahead of PMI Data

Economists are expecting the GBP to drop following the release of the PMI data for the UK. Investors are unlikely to see significant revisions being made to any of the three PMIs with the data predicted to shine a light on the widespread slowdown of the UK economy. But should the opposite be true, and the PMIs show revision, the GBP could rally from this and edge over its competitors. However, even so, the volatility and uncertainty of the upcoming election is likely to weigh heavy on the GBP/AUD rate over the coming week, regardless of positive economy data.

AUD May Receive Further Boost Following Solid Manufacturing Growth

With the GBP at an uncertain stage, the AUD could edge over the GBP with a duo of the GDP data as well as November’s manufacturing PMIs which are set to be handed out this week. Previous data suggested that the PMIs showed solid growth, and if this trend continues the Aussie Dollar will no doubt accelerate in strength.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

Underperformance Is the Key Word This Week for the Australian Dollar, with QE Predicted in 2020

The Aussie Dollar has been suffering lately, with no luck going into the latter end of this week either. Despite the RBA’s governor Philip Lowe suggesting that QE was not a tool to be used right now, he failed to remove it out of the question altogether and this has instilled fear of QE being utilised in early 2020.

QE Looking Likely for the RBA in the Early Stages of 2020

Economists have tipped QE for the RBA in early 2020. The current target for inflation has not been met and this has thrust the QE or negative rates into the question for the RBA. The markets are beginning to fret whilst the labour market deteriorates despite interest rate cuts from the bank. To rub salt into the wounds of the AUD, the global economy is still dragging its way through a slowdown. However, Lowe stated on Tuesday that extreme policy actions like these will be unlikely for Australia as the AUD growth should pick up next year.

What Would QE Mean for the Aussie Economy?

QE refers to the creation of new money from the RBA in order to buy government bonds and force their yields lower. These yields are integrated into all the interest rates that are charged across economies so when they are forced lower from central banks an indirect reaction of a reduction in borrowing costs for companies and households is also induced. The general idea with this is that low borrowing costs leads to more spending which ultimately can help lift inflation towards a predetermined target. However, in doing so QE means a lower return for investors and a more unattractive currency.

Us-China Trade Talk Looks to Break down Once More, AUD Looks to Suffer

For weeks the AUD has been banking on a successful trade deal between the US and China. Things appeared to be going well recently, but news broke yesterday that President Trump has signed the Hong Kong Human Rights and Democracy Act into law this week which has sparked immediate reaction from China. Investors are now worried that a breakdown could come to light as China sent threats of retaliation to the decision. The AUD is heavily reliant on the Chinese economy and therefore, should the deal not go through, it will likely face losses.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

AUD Positive Following RBA Dismissal of QE, but Remains Volatile and GBP Slumps

AUD has had no easy road in recent weeks. However, yesterday the Aussie Dollar rose following a dismissal of quantitative easing (QE) from the RBA. Meanwhile GBP retreated in response to recent general election polls.

QE Played down by Governor of the RBA

RBA governor Philip Lowe presented his speech yesterday to the Annual Australian Business Economists Dinner held in Sydney. He emphasised that QE was not on the RBA’s agenda at this point in time. He also elaborated that negative interest rates in Australia are “extraordinarily unlikely”.

These words of optimism gave a slight lift to AUD as investors had worried that QE was a technique due to be used following a previous dovish response from the RBA. Other factors like the inflation targets not being met, the labour market deterioration even with three bank interest rate cuts and the ‘Phase One’ deal between the US and China which still remains unsolved all weigh heavy on AUD and many believe that QE and interest rate cuts may be on the table at some point in 2020.

GBP Retreats in the GBP/AUD Exchange Rate Pairing Following Poor Poll Results for the Tory Party

GBP lost some ground yesterday as new general election polls were released. The results showed that the Tory party had begun to slip and lose its steady majority over the opposition Labour party. The scores from Kantar showed the Tories at 43% whilst the Labour party creeped up to 32% of votes. Economists have suggested that a surprise Labour win would send UK equities tumbling, even with a softer Brexit. Should the Labour party catch up or even surpass the Tories it will likely weigh on GBP as Brexit will not be so much a done deal as Boris Johnson has promised the markets.

AUD Hangs onto Hawkish Response from Dr Lowe Whilst Observing the Us-China Trade

AUD was put in a better position following Lowe’s speech, but the RBA failed to fully rule out the chance of QE or interest rate cuts, instead suggesting that these options were still on the table should Australia experience any rapid increases in unemployment with a decline in inflation. With the comments the gains seen by AUD began to slowly ease back. Investors will be looking to the US-China trade deal for any breaking headlines to suggest the deal is closer to being closed.

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

More Bad News for the Australian Dollar Following Trade War Breakdown and Poor Wage Data

The recent performance of AUD has not been spectacular to say the least. With underwhelming performances in recent figures and pressure being applied from the US-China trade wars, AUD rate has been in a decline.

US-China Trade Talk Hopes Knocked

The trade war has been ongoing for several weeks now and has had AUD firmly in its grips. Hopes were running high on Tuesday that president Trumps speech in New York may have been optimistic and given the market a boost. However, reports from Wednesday displayed the opposite, in that his speech left the market disappoint. There was a hope that he would divulge on the China talks, but instead proceeded to set out his stall for re-election in 2020. The potential boost to the market was flattened.

AUD Looks to Jobs Data to Reinstate Optimism

Wednesday left the Aussie dollar a little in the dark as wage data was released. The figures did not increase but held steady. This resulted in little effect on AUD strength but consequently did not do any damage either. Today (Thursday 14th), traders of AUD will be eagerly awaiting jobs figures which are due to be released. Current figures have shown that the Aussie jobless rate has risen this year, with a slowing of employment growth also. Should the jobs data disappoint, it is likely to undermine AUD’s recent resilience putting further pressure on the already stretched currency.

Australian Dollar Largely Balances on the Outcomes of Unfolding News

AUD is being largely affected by current affairs. With the disappointing revelations in Donald Trump’s recent speech, the market has reacted with a pessimistic view. This is not good news for AUD who would benefit from a positive deal for China. But the US seems to have given off a feeling that they aren’t seriously invested in obtaining a partial deal with China.

Investors in AUD will also been keeping an eye on today’s job data in hope that the figures turn out positive. Recent data has not been overwhelming but has held weight in some sectors. Should a positive return occur, AUD would get a much-needed boost to lift it out of it’s current two month low. The pressure on the Reserve Bank of Australia (RBA) to cut their interest rates is beginning to pile on, but with three cuts in 2019 already, investors are worried for how this will affect the currency and its strength against others like GBP.

For more sterling and Australian dollar news or if you have a currency requirement you can get in touch with me, James Lovick, directly at jll@currencies.co.uk, or call +44 (0) 1494 360 899 to discuss these factors in more detail.