Tag Archives: australian dollar

Pound makes gains vs the Australian Dollar after Turkish issue and UK inflation data due out (Tom Holian)

The Pound has made some gains vs the Australian Dollar over the last few days and the move appeared to happen following the news in Turkey that Donald Trump has imposed an addition to tariffs on both steel and aluminium on Turkey and this started to cause huge problems in the country.

The Turkish Lira has dramatically weakened in value over the last few days and this has caused a number of commodity based currencies to weaken as global investors have sold off riskier based currencies including the Australian Dollar.

After briefly flirting with rates in the 1.73 levels recently the Pound vs the Australian Dollar is now back to trading above 1.76.

Meanwhile, the Reserve Bank of Australia confirmed recently that it will be keeping interest rates on hold while it waits for economic growth to improve and this has also helped the Pound to make gains vs the Australian Dollar and the Australian Dollar is now at its lowest level vs the US Dollar in two years.

The RBA does not appear to be too concerned with the value of the Australian Dollar and because it is a big export market if the AUD continues to weaken then this could help to improve economic growth in Australia.

The UK and the Pound has had a good start to the week against a number of different currencies with the news that UK unemployment is close to its lowest levels since 1975 with the figure now sitting at 4%.

We could be in for further movement later this morning with the release of UK inflation data due to be published at 930am.

Inflation has been a big factor in the Bank of England’s recent decision to increase interest rates and with the data expected to show 2.5% year on year which is above the 2% target then this could provide further evidence in support of further rate hikes in the UK which could help to move GBPAUD exchange rates in an upwards direction.

If you would like a free quote or further information about how to save money compared to using your own bank when converting Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk 

 

 

Sterling Falls Lower against Australian Dollar – Brexit Jitters (James Lovick)

The pound has fallen even lower against the Australian dollar with rates briefly falling below 1.73 for the GBP AUD pair. The Australian dollar outlook isn’t looking that great at the moment with the ongoing trade war between the US and China. Only yesterday the US agreed a further 25% tariff on Chinese imports worth $60 billion. China is likely to retaliate further and it has even been reported that President Donald Trump is considering putting tariffs on everything the US imports from China which equates to about $500 billion. Already the Chinese stock markets are taking the brunt of this and if China does move into a downturn then this could end up harming the Australian dollar. Australia’s major export iron ore is sent to China in large volumes for steel production and so any global slowdown could see demand for this commodity fall sharply proving negative for the Aussie as a commodity currency.

The Reserve bank of Australia will be releasing the Monetary Policy Statement tomorrow which could offer some more clues as to when then the central bank may look to raise interest rates again. Although the next move is anticipated to be upwards the next hike is likely to be someway off yet.

Despite the above the pound has still managed to fall considerably lower against the Australian dollar this week although this is down to Brexit uncertainty in the UK following comments from both Bank of England Governor Mark Carney and Trade Secretary Liam Fox. Both have suggested there is a strong likelihood of a no deal Brexit which is spooking the markets and seeing the pound tumble. Until clarity is offered which is not likely to come until after the summer parliamentary recess the pound could see further losses. If the UK & EU cannot agree in the coming months on a withdrawal agreement then sterling is likely to fall lower.

For more information on Australian dollar exchange rates and how to achieve the best rates for buying or selling dollars then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Boosted on Stronger Retail Sales (James Lovick)

The Australian dollar has been boosted following a jump higher in Australian retail sales which saw the best performance in over a year. The better data signals a buoyant consumer market which should lend support to the Australian economy. The numbers jumped 1.2% for the last quarter which is considerably higher than the 0.8% that was expected and welcome news in that Australia has also suffered with weak wage growth which has been squeezing pockets down under.

The Reserve Bank of Australia meet on Tuesday to discuss interest rates although there is unlikely to be any change at this meeting. Interest rates are currently set at 1.5% and whilst no change is expected any comments following the meeting from RBA Governor Philip Lowe could see a market reaction for the Aussie.

Rates for GBP AUD are currently hovering around 1.75 for the pair and testing the lower levels seen in its recent range. Much of the slide has stemmed from the uncertainty in the UK over Brexit in recent weeks. Despite an interest rate increase last week from the Bank of England the pound has actually fallen after Governor Mark Carney suggested that the chance of a no deal Brexit was uncomfortably high. The pound has been trading on the back foot following on from his comments which have made the markets uneasy hearing this from the top. Until clarity is offered the pound is likely to remain under pressure against the Aussie. There is currently a good opportunity to sell Australian dollars for pounds and any additional uncertainty on Brexit could see the pound weaken further. British politics have gone into sleep mode with the summer parliamentary recess but expect more volatility for the pound towards the end of the month.

For more information on Australian dollar exchange rates and for assistance in making transfers at the best rates then please get in touch with me James at jll@currencies.co.uk

Where next for GBPAUD exchange rates?

Australian dollar exchange rates will now be moving into a potentially volatile week as we get a series of major tier releases which could well move the currency markets. Most notably, on GBPAUD we could see big movement from the UK Bank of England interest rate decision on the 2nd August as well as on the evening of 1st when we get the latest US interest rate decision. With both decisions having such a dramatic effects, what can we expect  on the GBPAUD pairing?

Interest rates are a key driver on the Australian dollar and it is the raising and lowering of the central bank’s levels which causes the movements on the currency markets. Just like a higher interest rate will make a savings account more attractive to invest in, a higher interest rate on a currency will make that currency more attractive to hold.

A big driver on the Australian dollar has been the raising of US interest rates with the US dollar gaining in strength as the US Federal Reserve raise their base rate. With the US interest rate now higher than the Australian one, the Australian dollar has weakened as funds and investments are moved from the higher yielding Australian dollar to the now higher yield US dollar.

This move weakens the Australian and has seen GBPAUD level rising in recent weeks although just lately GBP weakness has dragged the pair back down lower. Expectations for next week and the two key central bank decisions could easily GBPAUD levels back towards 1.80. This would be if the US raise rates which would strengthen the US dollar and weaken the Australian. We would probably also need to see the Bank of England also raise rates too, to see the level above 1.80.

Some analysts, myself included, are sceptical over the Bank of England raising rates. If they fail to raise or perform a soft raise, which essentially writes out any future hikes, we could then see the pound drop. With much of the good news priced into a possible hike, it seems that clients holding on to see the pound rise could once again end up disappointed.

For more information on the best potential strategies to maximise your position please contact me Jonathan Watson by emailing jmw@currencies.co.uk

Australian Dollar Forecast – Trump Agrees Zero Tariffs with EU (James Lovick)

The pound has made a small recovery against the Australian dollar with rates back over 1.77 for the GBP AUD pair. The ongoing theme for the Australian dollar in recent weeks has been the trade war story which has stemmed from trade policy decisions made by US President Donald Trump. The latest in the story is that the President has now agreed with the EU tariff free trade between the US and EU. Whilst this does not directly have an impact on the Australian economy it does signal a change in tact by President Trump and could suggest there is light at the end of the tunnel in this escalation of trade tariffs with China. The concern for the Aussie is that if there is a global trade war then the commodity currencies could suffer so any softening in trade policy coming out of the US could actually be seen as good for the Australian dollar.

Economic data from down under has been stronger in this last month with retail sales and consumer confidence performing better than expected. The recent employment data was strong and highlighted a buoyant workforce which has also proved beneficial for the Australian dollar.

Now that the British parliament has ended for the summer recess there are unlikely to be any major developments on Brexit until the end of August or early September. The pound has been left on a weaker footing after the high profile resignations in government and some concern over the dreaded no deal scenario. Clients looking to buy Australian dollars could find some better opportunities on the horizon if a deal can be reached on Brexit, but we are still probably a few months away from such an outcome.

For assistance in making transfers either buying or selling Australian dollars at the best rates then please get in touch with me James at jll@currencies.co.uk

Australian Dollar continues to lose value as inflation levels stall

The financial markets don’t expect to see the base rate of interest change down under until the end of next year according to futures markets, and this is perhaps one of the reasons behind the Aussie Dollars weakening currently.

If the Reserve Bank of Australia (RBA) doesn’t amend rates the AUD will lose competitiveness as we’ve already seen, as the likelihood of investors holding assets in the currency diminishes owing to the less competitive of the currency. The US Dollar on the other hand has benefited greatly from its more aggressive monetary policy and the greenback has strengthened by such an extent that US President, Donald Trump has voiced his concerns.

The latest bout of Inflation data out of Australia shows that inflation has risen by 2.1% over the past year, which is slightly lower than what economists were expecting. There doesn’t appear to be much momentum regarding Australian inflation levels which is perhaps the reason behind the low expectations of a rate hike in the short-term future.

Although the Pound has been under pressure in recent months owing to the Brexit plan uncertainty, the Pound to Aussie Dollar rate is still towards the top end of it’s longer term trend, which demonstrates the pressure AUD exchange rates have come under. The GBP/AUD pair is likely to be driven by both monetary policy and UK based politics as the UK is going through a crucial time due to the Brexit.

Those monitoring the Aussie Dollars value should also pay attention to US President, Donald Trumps trade tariff’s plans as AUD has come under pressure owing to these concerns. With the Australian economy being reliant on global demand a slowdown to the global economy is likely to have a negative impact the Australian Dollars value.

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.

GBP/AUD no longer testing 1.80, is a move down into the lower 1.70’s now likely?

After testing the 1.80 mark for a number of weeks, the Pound has recently slipped from these high levels and now the pair are trading closer to 1.75. The 1.80 level does appear to be a resistance and for some time now Sterling sellers would have been best to target their transfers when the mid-market level is as close to 1.80 as possible.

Uncertainty surrounding the UK governments Brexit plans and whether they will be agreed upon in time is behind the drop in the Pound’s value. The fall hasn’t just been against the Aussie Dollar but also against many other major currency pairs with the fall against the US Dollar being one of the most dramatic, as it’s hit a 10-month low.

This week it’s emerged that the Australian jobs market is alot healthier than expected after a substantial amount more jobs were created in May than expected. This has boosted the Aussie Dollar as up until this week the average amount of new jobs was just 16,000 monthly.

One potential downside for the Aussie Dollar is the lack of movement with regards to monetary policy, as the Reserve Bank of Australia doesn’t plan on amending interest rates this year.

With many major economies beginning to make the hikes the Aussie Dollar may lose value as investors opt not to hold funds in AUD.

With little economic data out of Australia for the remainder of the week, our readers have time to get in touch and plan around transfers next week. Do feel free to get in touch if you would like to discuss next week’s economic data releases and how they could impact the rates.

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.

GBPAUD remains range bound

Over the last 30 days GBPAUD exchange rates have fluctuated in the higher 1.70s with minimal movement as both currencies seem to have been devaluing at the same pace. At the latest Reserve Bank of Australia meeting officials showed concern in regards to the trade tariffs that have been imposed on China by the US. The Australian know that a slowdown in China will have an impact on the Australian economy. Furthermore the International monetary fund have waded into the debate and announced an all out trade war will end up costing the global economy over $430bn.

UK Prime Minister Theresa May is under extreme pressure and last night threatened Tory rebels that she would call a general election if the amendment in regards to the customs union went through the Commons. The uncertainty of another General election would certianly weigh on the pounds value. Furthermore Governor of the Bank of England Mark Carney also failed to help the pounds value yesterday, as he stated a Brexit no deal would mean the Bank of England would have to rethink their future plans.

At the end of the week, UK politicians break for the summer holidays, therefore I expect Brexit related news to go quiet for a few weeks. All eyes will turn to the Bank of England’s interest rate decision early August. The market has been pricing in a hike, however I expect the Bank of England will fail to deliver which will mean sterling takes a hit. Therefore I wouldn’t be surprised to see GBPAUD fall back towards the mid 1.70s over the next month.

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 – Sterling stands strong depsite Davis resignation (Daniel Johnson)

GBP/AUD – The progress in Brexit negotiations is key to the value of GBP/AUD. The resignation of chief Brexit negotiator David Davis does not bode well for Sterling.

After Theresa May released her intentions for Brexit David Davis announced he thought the deal was “unworkable” and has subsequently resigned. Angela Merkel has also stated the deal is unworkable.

Despite this the Pound remained robust against the Aussie and we did not see any significant falls. This can be attributed to positive UK data, namely Services Purchase Manager Index (PMI) which came in at 55.1, the highest since October 2017. This is significant as Services makes up around 70% of UK GDP.

There is also of course the ongoing trade war with China and the US which is certainly putting off investors moving to the Australian Dollar. Commodity based currencies are not as popular in times of global economic uncertainty. China is the biggest purchaser of Australian goods and services and Chinese growth will be hindered by the trade war. This in turn will hit the Australian economy.

Despite the US initiating these trade wars the US Dollar continues to gain strength as investors seek a safe haven currency with high returns. The Fed has hiked interest rates on two occasions this year ant there is set to be more. Ten year treasury bonds currently have the highest returns in over four years.

GBP/AUD is currently range bound between 1.75-1.80. AUD buyers aim to move when interbank hits 1.79.

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

 

 

Australian Dollar Poised for Volatility after US Tariffs are Enforced (James Lovick)

The Australian dollar is now set for a volatile period after US trade tariffs on Chinese goods kicked in this morning as planned. The Australian dollar as a commodity currency is likely to be sensitive to any further escalations in these trade wars and the dollar could come under considerable pressure. $34 billion worth of tariffs have been imposed as of today and China has already reciprocated. US President Donald Trump has signalled his intent to increase these tariffs to as much as a staggering $450 billion on Chinese products if China retaliated.

It will now be interesting to see the response from the US after this retaliation and where this heads next. The EU has also been embroiled into these trade disputes highlighting how big an issue this all is. If global economic growth falls in the future then the Australian dollar is likely to be one of the hardest hit.

GBP AUD

Today marks a hugely important today for those clients looking to buy or sell Australian dollars with pounds. British Prime Minister Theresa’s May will be holding a cabinet meeting at Chequers to finalise the detail on Brexit and how close Britain will be aligned to the EU. There has been much disagreement within her cabinet and today should give guidance as to whether Britain will pursue a soft or a hard Brexit. The pound is likely to react accordingly and this meeting does have the potential to cause some fireworks.

No details have yet been released but the outcome of today’s meeting will form the basis for a white paper on Brexit. A softer Brexit that maintains trade and one that is likely to be agreed by the EU is likely to see the pound rally. However any resignations or objections from within government could create even more uncertainty for sterling exchange rates. Clients would be wise to plan around this event as we could finally be at the tipping point.

For more information on the Australian dollar and for assistance in making transfers at the opportune time then please get in touch with me James at jll@currencies.co.uk