Tag Archives: australian dollar forecast

Weaker AUD beneficial for the Australian economy, where next?

The recent RBA, Reserve Bank of Australia Minutes showed us that the RBA view the recent weaker Australian dollar as good news for the economy in helping to support growth. Australia’s economy is heavily reliant on the sale of its raw materials globally, including to China, its major trading partner. The expectation here is that the RBA will not be in any rush to raise interest rates, they view the weaker currency as ‘good news’.

The big news for this week on the Australian dollar is Unemployment data released in the early hours of tomorrow, at 12.30 GMT. The figures are predicted to show the Unemployment rate holding steady but a lower participation rate and possibly a lower employment rate. This could see the Australian dollar weaker as it underscores the recent direction and sentiment that has weakened the currency.

This could mean the Australian dollar continues to drift lower and remain weak, particularly owing to other factors including the likelihood of Trade War issues continuing to weigh on China, its largest trading partners. Markets are concerned that the Chinese economy is struggling as a result of the trade disputes with the US and Donald Trump, this has seen some economic indicators in China reach concerning levels.

China is struggling with a slowing rate of growth and concerns over home sales, rising Inflation and also falling car sales. Other examples of anxiety include the amount of debt taken on by Chinese authorities in their pursuit of infrastructure to build their economy. All of this is painting a slightly worrying picture for the Chinese economy as the trade wars are likely to get worse and this will all put pressure on the Aussie dollar too.

If you have a transfer involving the Australian dollar into any other currency and wish for some expert insight into the trends and themes to move the market, why not get in touch with us. We are a firm of specialist FX brokers with many year’s experience in managing large volume international payments.

Thank you for reading and we hope to hear from you soon.

Jonathan Watson

jmw@currencies.co.uk

Brexit Clarity could cause further gains for Sterling against AUD. (Daniel Johnson)

GBP/AUD – We have seen Sterling strengthen over the Australian Dollar of late, breaching the 1.80 resistance point and remaining above it. One of the main catalysts is positive news on Brexit. Chief EU Negotiator, Michel Barnier stated recently that he believes it is realistic that a Brexit deal could be in place in 6-8 weeks. It has also been revealed that there maybe a solution to the Irish border. There maybe the opportunity to use technology to solve the problem using barcodes on shipping containers to verify where goods have come from and where they are going to.

The Australian economy does have it’s own worries however. Australia is heavily reliant on China purchasing it’s exports, with China engaged in a trade war with the US this will hit Chinese growth which in turn will hit the Australian economy. With global economic uncertainty causing investors to seek safer haven investments the Australian Dollar is not as popular as it once was. The US Dollar is the destination of choice offering the highest 10yr bond yields for several years and there is the prospect of further rate hikes from the Federal Reserve this year.

There is also problems with consumer spending. High wage growth areas are becoming increasingly more expensive which is forcing Australian’s to spend there funds on necessities rather than luxury goods.

I feel Sterling could be set for further gains against the Aussie, but be wary as Brexit talks intensify we could see volatility. If you are buying the Aussie short term aim for high 1.83s, possibly 1.84. I feel 1.85 will be difficult to breach unless we receive firm news on Brexit.

If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

What can we expect this week for GBPAUD exchange rates?

The week ahead for the Australian dollar looks set to be dominated by continuing news on the likelihood of future interest rate hikes down under. Last week saw a mixed bag of data as investors weighed up the conflicting signals and the overall outlook on the currency pairing. This was underscored by a very positive unemployment report which helped the Aussie to rise against its counterparts. Good news on the Australian dollar has however been tempered by the worrying prospect of fresh economic tariffs from Trump on China, Australia’s main trading partner.

The main economic news this week will be the RBA, Reserve Bank of Australia Meeting Minutes and also the House Price Index released this evening. Later in the week we will also see the the RBA Bulletin and also a speech by Assistant Governor Christopher Kent. It was a speech by RBA Assistant Governor Bullock last week which saw movement on the rates as he highlighted growing household debt.

Clients with a currency transfer involving the Australian dollar could now face a range of events to move the rates, it does appear the factors which have weakened the Aussie in recent weeks, are set to remain. Global concerns over Trade Wars which are set to negatively impact China will weigh on economic sentiment and this will influence the Australian dollar.

If you have a transfer to consider buying Australian dollars with pounds there is also the EU Summit which is coming up which could see a volatile week on GBPAUD exchanges. Brexit continues to be the main driver on the pound and this information could see some volatility on the pair.

If you have a transfer to make involving the Australian dollar, we are in business to offer assistance with the timing and the planning of any currency transfers. For more information at no obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Jonathan

Will the Australian Dollar continue to weaken, and what’s causing the weakness?

The Aussie Dollar is under pressure at the moment, with the currency hitting a 20-month low against the US Dollar earlier this week which has hit the headlines. This most recent drop off was spurred by a number of major Australian banks such as Westpac, Suncorp and Adelaide Bank have all increased their mortgage lending rates.

The ongoing saga surrounding the US and Canada’s North American Free Trade Agreement has also weighed on the Aussie Dollars value as sentiment surrounding the emerging markets has waned, after the talks between the US and Canada didn’t result in an agreement. The South African rand has also lost a lot of value recently for similar reasons.

No interest rate hikes are expected from the Reserve Bank of Australia until at least this time next year, and with US interest rates now higher than Australia’s the currency has lost a competitive edge which is another reason for the AUD weakening.

Moving forward I’m expecting to see the issues between the US and Canada as well as the issues with China to continue to weigh on the Aussie Dollar’s value. This is because of the Australian economies dependence on a strong global economy especially as the country becomes more service based.

This week there are a few further data releases that will provide us with an overview of the Australian economy, as trade Balance figures are released tomorrow and Home Loan Figures will be released on Friday.

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.

To what extent will Turkish sentiments drive GBPAUD this week?

The Australian dollar has been weakening as investor sentiments are frayed following the Turkish concerns which have been rattling financial markets. Essentially riskier assets are being sold off in favour of safer haven investments like the US dollar and Japanese Yen. The Turkish currency is being sold off and the funds are finding their way into the US dollar, creating big swings on other currencies like the Aussie.

GBPAUD has risen almost 1% today as investors also sell the Australian dollar because they feel it could also be at the mercy of the same sentiments which have driven the Turkish lira lower. For many years the cheap flow of money from the US in the form of QE (Quantiative Easing) had found itself invested  globally in emerging markets which offered higher returns.

With the market becoming spooked at the potential of further sell-offs, we could easily see a further deterioration in the Australian dollar which would see it become more expensive to buy. The outlook is not all rosy for AUD buyers with sterling however, as the rising US dollar is weighing the pound down too.

GBPAUD could be in for a very volatile period as the market struggles to price in the uncertainty up ahead. The market is eagerly looking for some kind of solution to the crisis which could easily spread to other investments and currencies. The problems in Turkey are not just effecting Turkey, many European banks have huge exposure to Turkish investments.

There is also important data due for the UK with Unemployment Tuesday, Inflation on Wednesday and Retail Sales Thursday. On the Australian side we have Unemployment data released Thursday, all in all a busy week ahead for GBPAUD.

I foresee a levels in the mid-1.70’s following a testing of the 1.73 level last week. In the absence of a new negative news I see sterling finding some support, the Turkish pressures should also ensure the Australian dollar is not appreciating too much.

For more information on the best rates and strategy to maximise your deal, please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

US Trade Wars to hurt the Aussie (Daniel Johnson)

How will the ongoing Trade Wars effect AUD?

Trump is  fighting trade wars on several fronts. He is unhappy with the trade deals currently in place with the EU, China and the US and is also renegotiating the North American Free Trade Agreement (NAFTA) involving Canada and Mexico.

The US has been imposing tariffs on all fronts, with the tariffs of choice being steel and aluminium. The tariffs placed on China could prove particularly detrimental to the Australian economy due to Australia’s heavy reliance on the Chinese purchasing it’s raw materials. The tariffs could hit Chinese growth which would cause a change in demand and price for Australia’s raw materials, particularly iron ore.

Global economic uncertainty is causing investors to move away from riskier commodity based currencies such as AUD in search of safe haven investments. Despite the US being at the centre of the ongoning trade wars. It is proving to be the destination of choice for investors. Interest rate levels are impressive and there is predicted to be several more hikes from the Fed this year. Ten year treasury bonds are also offering some of the highest returns in years.

Personally I feel China is in a trade war that cannot be won. If they intend to match US tariffs Dollar for Dollar they would need to impose tariffs on all US exports which is simply not feasible and would hit both economies hard. This would in turn have repercussions on the Aussie.

GBP/AUD -Sterling remains fragile due the lack of clarity on access to the customs union. There is due to be a proposal put forward from Theresa May to her cabinet at Chequers on Friday. If the proposal is accepted on the third attempt Brexit negotiations can move forward and the proposal can be presented to Brussels.

If the proposal is initially accepted on Friday you can expect Sterling strength. Personally if I was buying Australian Dollars short term I would be moving in the 1.79s. 1.80 is proving to be a resistance point.

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.

UK GDP gives the pound a boost vs Australian dollar

This morning at 9.30am UK Gross Domestic Product numbers were revised to 0.2% from 0.1% for quarter 1 which has given the pound a boost against the Australian dollar. The Bank of England in recent weeks have been hinting that an interest hike could occur as early as August and the improvement in GDP certainly helps the cause. For Australian dollar buyers rates have improved by 0.5%.

Another reason why the pound has been making progressive gains against the Australian dollar is that the Aussie has been weakening due to the trade war between the US and China. The US is Australia’s most important defence ally and China the most important trade partner, therefore Australia are stuck between a rock and a hard place. The theory behind it is that further tensions will put further pressure on the Australian dollar and therefore I would expect GBPAUD to break through 1.80.

In other news the EU summit is now over, and the message from the EU is that the UK need to make progression fast. UK Prime Minister Theresa May has called a meeting at her Cheques country side retreat,  and the full cabinet will attend. The rumour on the market is that Theresa May could announce a soft approach which will be outlined in her white paper which should be released early July. I expect this may give the pound a small boost.

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.

 

 

Hawkish Bank of England comments push the Pound higher, will GBP/AUD breach 1.80 again soon?

Despite the Pound to US Dollar rate trading at a 7-month low against the US Dollar, the currency has actually been boosted against most major currency pairs today.

The reason for the boost to the Pound to Aussie Dollars value can be put down to the Bank of England’s comments and the voting pattern of the Bank of England members. The Aussie Dollar lost a lot of value against the Pound today which is why the focus of this blog is on that particular pair.

There are now 3 members of the Bank of England that wish to increase interest rates in the UK, and this is one of the reasons for today’s boost to Sterling exchange rates. The highest the GBP/AUD pair have hit today is 1.7979 although the pair have since slipped off which to me demonstrates that there may be resistance at the 1.80 mark as we’ve previously seen.

There isn’t expected to be any rate hikes from the Reserve Bank of Australia until next year, so I do think that the Pound will climb against AUD should the hints at a rate hike later in the year from the BoE materialise.

With a quiet end to the week in terms of data I’m expecting to see AUD exchange rates driven by sentiment.

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.

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.