Tag Archives: australian dollar forecast

Weak data results in a drop for the Aussie Dollar, where to next for AUD exchange rates?

There’s been a loss for the Aussie Dollar across the board of major currency pairs today, with it’s losses against the Pound and the Japanese Yen being the biggest.

Employment figures down under for May were released this morning, and that caused the Aussie Dollar to drop as the figures released were worse than expected. The figures have got worse in recent months which is another reason for the sell-off of the Aussie Dollar.

Some disappointing data out of out of China recently has also weighed on the Aussie Dollars value, owing to the close trading relationship between the two nations. This isn’t an unusual pattern and those planning on making a currency exchange involving the Aussie Dollar should consider this in future.

The poor data out of China has caused China-linked commodity prices and also the Chinese stock market to fall, and this isn’t a great sign for the Aussie Dollar moving forward. Fears surrounding the trade tariff’s potentially put on China by the US are also weighing on AUD exchange rates.

There’s a speech planned by Reserve Bank of Australia assistant Governor Ellis tomorrow. Although no changes to monetary policy down under are expected this year its worth following his comments in case he alludes to future monetary policy changes or even the slowdown in the Australian economy recently.

If you would like to be notified in the event of a major market move for AUD exchange rates, do feel free to register your interest.

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.

 

Is the Australian Dollars reverse in fortunes likely to continue?

The Australian Dollar is continuing to strengthen, and put in another strong performance yesterday as sentiment surrounding the Aussie Dollar appears to be turning for the better.

There is renewed hope that the coalition in Italy will pull through after it stalled over the weekend, and this is helping push the Aussie Dollar higher as it removes uncertainty from the markets to a certain extent. There cost of commodities has also increased recently which has boosted the Aussie Dollars value, as the Australian economy is highly export driven.

I also think that now the talks of a trade war between the US and China have subsided, fears surrounding the global economy have also subsided leaving the Aussie Dollar in a stronger position. The positive moves for AUD recently can be highlighted when we consider that the Pound has lost almost 10-cents vs AUD in a short space of time.

It has also emerged that the US economy isn’t growing at the rate some economists had expected, meaning that there may not be as many rate hikes in the US as some had expected. This has boosted AUD as it could means investors will be less likely to move funds from AUD into USD in order to get a greater return.

Moving forward I expect to see AUD continue to strengthen, although further rate hikes from the US Fed Reserve later in the year could impact AUD negatively.

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.

Little reason for optimism for AUD buyers (Daniel Johnson)

GBP/AUD –  Sterling has lost significant ground against he Aussie of late. The buoyancy levels of 1.80-1.85 are gone. GBP/AUD currently sits in the 1.75’s.

This is predominantly due to Sterling weakness rather than AUD strength. There is little reason to be optimistic at present for Aussie buyers. The Brexit situation is likely to be drawn out and problematic, with votes on areas of the deal having to be passed back and forth between the House of Commons and the House of Lords for approval. Throw into the mix that many of those involved in negotiations have ulterior motives, seeking to fulfil there own agendas and Sterling could remain weak for the foreseeable future.

Economic data has also been appalling from the UK, particularly GDP which came in at 0.1%, the worst data release on GDP for over five years. The proposed interest rate hike from Bank of England (BOE) in May did not occur and I would be surprised to see one this year.

Australia is heavily reliant on China buying it’s raw materials, in particular iron ore and the US threatening to impose huge tariffs has the potential to slow Chinese growth which in turn will hit the Australian economy. China has agreed to purchase more than USD 200bn in goods and services from the US which has put a hold on the tariffs, the Aussie benefited as a result.

Current trading levels are poor for Aussie buyers, but it could get worse. I can appreciate the reluctance to trade due to the psychological aspect of trading at current levels when it was 1.84 only a short time ago, but believe me there is very little justification to get to those levels again in current market conditions.

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

 

 

US-China Trade War Truce bodes well for the Aussie (Daniel Johnson)

Halt on tariffs benefits the Aussie

There has been an ongoing trade war between the Chinese and the US following Trump’s appointment as President. He has a thinly veiled issue with the Chinese and is highly agitated at the amount of debt the US is in to the Chinese. His mantra is “make America great again” and he took fire at the Chinese by threatening to impose tariffs that were simply unrealistic, that would be detrimental to both sides.

These tariffs would impact Chinese growth and in turn hit the Australian economy. Australia is heavily reliant on China for the purchase of it’s raw materials, particularly iron ore. If the Chinese economy suffers due to Trump’s tariff s the knock on effect will impact the Australian Dollar.

The US and the Chinese have recently agreed to put a halt to the trade war under the premise that China will purchase USD 200bn worth of US goods and services. Following this announcement the Aussie strengthened significantly. In particular against Sterling, this news along with poor economic data and a very  poor interest rate forecast from the Bank of England (BOE) has caused the pound to lose nearly 10 cents against the Australian Dollar. It was only recent we saw GBP/AUD at 1.84, we were in the 1.76s during today’s trading.

When to move?

AUD Sellers- Take advantage of current levels, 1.80 is an incredible selling price, let alone 1.76. Keep in mind GBP/AUD was 2.20 pre Brexit and the Pound is chronically undervalued.

AUD Buyers – If you have to move short term I’m afraid 1.79 should be your new target, the 1.80 resistance point has now been broken.

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

 

Wage growth puts further pressure on the RBA

This week Australia have released the latest quarterly wage growth numbers and Australian dollar sellers have been left disappointing. The consensus was for wages to have grown by 0.6%, however in fact wages had grown by 0.5% for the quarter. The poor wage growth numbers are keeping inflation beneath the Reserve Bank of Australia’s target which is directly having an impact on Australian dollar exchagne rates.

If wage growth numbers continue to dwindle along and inflation remains below the RBA target, policy makers will have no choice but to leave interest rates on hold at record lows and this is what many leading forecasters are predicting, which is no surprise. Speculators move their assets chasing higher returns of interest and with the US marching ahead and potentially looking to raise interest rate another couple of times this year investment is going to leave Australian shores and land in the US.

In regards to GBPAUD exchange rates the pound has been performing worse than the Australian dollar as exchange rates have dropped below 1.80. UK economic data has disappointing which has stopped the Bank of England from raising interest rates and the Brexit negotiations continue to weigh on the pounds value. Today UK Prime Minister Theresa May confirmed that the UK will release a whitepaper before the June summit which will outline the UK’s full position.

When the whitepaper is released this could have a clear indication about the future path of the UK and therefore GBPAUD exchange rates. If you are converting GBPAUD within the next 3 months this event should be monitored closely. 

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 the currency pair you are converting, 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.

What can we expect from the Australian dollar ahead?

The Australian dollar has been stronger as heightened concerns the US may not raise interest rates as quickly as expected triggered a rise in the value of the AUD. Investors have been buying up the US dollar in anticipation of a higher interest rate which would make the currency more attractive to hold, however, with the Australian dollar holding attraction with its higher interest rate, it remains strong.

The next big news for the Australian dollar will be next week with the latest RBA (Reserve Bank of Australia) meeting minutes which will give us the latest news from the RBA’s meeting last week. The expectation is for the RBA to be possibly looking to raise interest rates longer term, some commentators believe this could be as soon as the end of the year but personally, I do not expect anything too soon.

Investors are bracing themselves for the longer-term raise from the RBA which has helped to fuel the recent strength of the Australian dollar, overall impressions are for the currency to avoid some of the more familiar problems where it has dramatically weakened. A key driver of this volatility had been the move from the latest decision so, the next meeting will be crucial to get an idea of where Australian dollar will be headed next.

If you have a transfer buying or selling Australian dollars we can help with the planning and management of any deals with a view to securing the latest information and news when required. For more information please feel free to contatc me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for getting in touch and I look forward to hearing from you and assisting in the future.

 

US dollars strength puts pressure on the Austrlaian dollar

In recent weeks the US dollar has gone from strength to strength and investors are second guessing that commodity currencies will continue to come under pressure in the weeks to come. The US dollar index which measures the US dollar against a basket of major currencies is up 3% since mid April. Furthermore 10 year US bond yields have broke through 3% for the first time since 2014.  When bond yields are on the rise this tends to mean the central bank have another reason to hike interest rates.

Over the last few years speculators have left their assets in the Australian dollar due to the higher interest rates. But now that the US have hiked and it appears that further hikes are on the horizon I expect speculators will continue to sell off their Australian dollars in a bid for higher returns elsewhere. In regards to USDAUD exchange rates the Australian dollar has dropped below 0.75 for the first time in 10 months.

The problem the Australian dollar has is that the Reserve Bank of Australia have announced that there is no reason to hike interest rates anytime soon and some economists are suggesting the Australian dollar will be left behind as a hike doesn’t look likely for at least 18 months.

When buying or selling Australian dollars its always important to analyse both currencies you are converting. For example it looks like AUDUSD will continue to fall in the weeks to come as the US dollar continues to strengthen therefore selling Aussies to buy US dollars sooner rather than later may be wise. However if converting AUDGBP, the pound is under pressure because of Brexit and the Bank of England holding off for a period may be wise.

For people that buy and sell Australian dollars on a regular basis or are looking to make a one off transfer, the currency company I work for can save you money. Feel free to send me the reason for why you are converting currency, the currency pair you are trading (AUDGBP, AUDUSD), and the timescales you are working to and I will send you my forecast and the process of using our brokerage drl@currencies.co.uk.

BOE May Rate Hike now in Question (Daniel Johnson)

GBP/AUD in detail

Following a host of positive data from the UK last month we have seen a complete reversal. We saw a fall in inflation, (which is now below average wage growth), retail sales were shocking, predicted to be – 0.5% coming in at -1.2% and today a fall in GDP to 0.1% when 0.3% was the expectation.

A rate hike from the Bank of England (BOE) was widely expected in May, however Mark Carney, Governor of the BOE said in a recent BBC interview that a hike may occur later in the year. This along with the poor run of data could well stop the rate hike occurring. Despite this I would not rush out and sell my Sterling to buy Aussie. I still believe we are range bound between 1.80-1.85.

If it drops below 1.80 for more than a few days it may be time to consider moving if you have to move short term. Personally I would hang on for the high 1.83s or 1.84s. If you have real concern consider a Stop/Loss contract for protection.

The Reserve Bank of Australia (RBA) has a quite negative outlook in regards to hiking rates, there is little chance of a hike this year. If you take into consideration the Federal Reserve have already raised rates to 1.75% and intend to hike rates as many as two further times this year you can see why investors are moving from the Aussie to the Greenback. The US-China trade war could also be damaging to the Aussie. If Chinese growth is hindered by tariffs you would expect Australia’s primary export, raw materials to fall in demand and price which would be bad news for the Australian Dollar.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

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

Thank you for reading.

Could GBPAUD continue towards 1.90?

Since the start of the year GBPAUD exchange rates have improved by over 10 cents, and clients converting £200,000 into Australian dollars are now achieving an additional 25,ooo dollars. 

The Australian dollar continues to struggle on due to the over inflated housing market which is a reason why the Reserve Bank of Australia continue to keep interest rates on hold at 1.5%. Furthermore ‘trade wars’ between the US and China (Australia main trading partner), is causing investors to move away from risky commodity currencies such as the Australian dollar.

The pound has had a good run of late due to the UK securing a transitional deal and the Bank of England hinting that an interest rate hike is likely for June. Today the UK will release their latest average earnings numbers and on Thursday their latest inflation numbers. The consensus is for average earnings to outpace inflation for the first time in many years.

If this is the case, an interest rate hike looks almost certain and therefore I expect the pound may rise slightly against the Australian dollar. However I expect that the market has already priced in the interest rate hike in May, therefore I don’t see the pound making substantial gains.

Looking further ahead I don’t believe it’s all smiles for Australian dollar buyers. The most important element of Brexit is to be decided which is the trade talks. Over the last 18 months we have seen the pound come under pressure when a fresh round of Brexit talks begin. If you need to purchase Australian dollars short to medium term, this week could provide the best opportunity for some time to come.

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.

Westpac issues warning for Australian dollar sellers (Dayle Littlejohn)

In a recent report by Westpac have warned their Australian clients that further falls could be on the horizon for the Australian dollar. Commodity prices including iron ore and coaking coal (used for making steel) have dropped 15-20% since February and this trend could continue if there is a slowdown in china like many forecasters are predicting. One of the reasons why people believe there will be a slowdown is because China appear to be entering a trade war with the US.

In other news Governor  of the Reserve Bank of Australia Philip Lowe will address the public Wednesday morning and give another overview of how the Australian economy is performing. The recent commentary from the Reserve Bank of Australia is that interest rates will remain on hold for the time being. This is another reason why forecasters are suggesting the Australian dollar could lose further value as carry traders sell off their positions and look to purchase US dollars due to the higher returns now on offer.

When buying or selling Australian dollars it’s important to analyse the other currency that you will be converting as it can have an impact on the exchange rate you receive. The key data releases to look out for around the globe are ECB Mario Draghi’s speech, US Consumer Price Index, US FOMC minutes all Wednesday afternoon and Governor of the Bank of England Mark Carney’s speech Thursday afternoon.

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.