Tag Archives: australian dollar

US/China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Progress in US/China talks

Due to Australia’s heavy reliance on China purchasing its goods and services any fall in growth from China has an impact on the Australian economy and in turn the Australian Dollar.

The US/China trade war is a huge concern amongst investors, a trade war between the world’s two largest economies has huge implications. The Trump administration wants China to change its economic strategy, something Chinese President,  Xi Jinping will be reluctant to do. The changes that are being asked for would hit the Chinese economy hard and  long term. It may be the case that the Chinese will try and give very small concessions in  bid to lengthen the trade war and out last Trumps reign. A dangerous game considering the US has threatened to increase tariffs to 25% should their terms not be met. 25% is a huge increase and if China retaliate both economies will suffer not to mention the global impact.

At present, trade talks seem to be progressing well.  When asked about how talks were going yesterday in Beijing, US Treasury Secretary , Steven Mnuchin replied “so far so good.”

If it were not for the lack of clarity surrounding Brexit I think Sterling would be making gains against the Aussie. Although, the pound could lose value as negotiations with Brussels intensify I think the likely outcomes are either an 11th hour deal or an extension, both of which could cause significant Sterling strength. Morgan Stanley recently suggested there was less than a 5% chance of a no deal scenario. The market moves on rumour as well as fact so due to a no deal Brexit being largely factored out of the equation at present, if it were to occur expect  a large drop in the pound as this outcome is definitely going against the grain.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavour 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 18yrs and FCA registered.If you would like my help feel free to email me at dcj@currencies.co.uk.

US China Trade War Intensifies (Daniel Johnson)

AUD losing investor confidence

Australia is heavily reliant on China purchasing its goods and services. Any fall in Chinese growth has a knock on effect on the Australian economy and in turn the Australian Dollar.

The US China trade war is a serious concern for investors and it is pushing them away from riskier commodity based currencies such as the Australian Dollar. The US and China are currently in talks and the Trump administration wants China to make fundamental  changes to its current economic strategy.

If China were to make some of the changes requested it would have serious implications on the Chinese economy. Chinese President, Xi Jinping knows this and it may be the case that he will try to make as little concessions as possible in an attempt to outlast Trump’s reign.

It is a risky game considering the US has threatened to increase tariffs by 25% on $200bn worth of goods. The US has said they will implement the tariffs if the two sides fail to make progress by 1st March.

According to a UN trade agency report Asian countries would be the most effected. The implications of such an increase should not be understated. With two super powers trading blows the effect will be wide reaching and will hit the global economy.

The Australian Dollar could be among the hardest hit until we have a resolution, which could be some way off, AUD will remain fragile.

If it were not for the lack of clarity surrounding Brexit I think we could see some decent gains for Sterling against the Aussie, unfortunately the uncertainty over Brexit is outweighing concerns down under and the Pound continues to be anchored at low buoyancy levels. There are alternative options to May’s deal being put forward, but there is still no firm way forward. May’s intention is to gain concessions from Brussels that will be accepted by parliament. She has already attempted to this in December after delaying the initial vote. May was stone walled by Brussels and European Commission President, Jean Claude Junker has continually stated there will be no concessions made. Many still believe a deal may be struck at the 11th hour, but Brussels have stuck to their guns up until this point. The PM is currently in a worse position than in December following the diminishing probability of a no deal scenario (one of her only sources of ammunition) with Morgan Stanley predicted there is less than a 5% chance of a No deal Brexit.

If you are looking to move GBP – AUD short term aim for the 1.83s.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. 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 18yrs 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.

 

 

 

GBP to AUD Rates Find Support above 1.80 (James Lovick)

Rates for pound to Australian dollar have found support at the start of this week after a drop off in the GBP to AUD pair at the end of last week. Brexit continues to be the main driver for sterling exchange rates and is creating considerable volatility for the GBP vs AUD pair. The pound has made reasonable gains in recent weeks as the markets remain optimistic that a no deal Brexit appears to the less likely outcome and that there is still hope from all sides that a deal will be reached between the UK and EU. Until some certainty is offered however the pound is unlikely to make any material gains against the Australian dollar. The next important date in British politics is the 14th February where another vote will be held in the House of Commons.

The Reserve Bank of Australia meet this week to discuss interest rates and future monetary policy although expectation is that there won’t be any change in the base rate this time round. Economic data in China is likely to have more sway on the future of the Australian dollar. The ongoing trade war between the US and China continues to raise concerns for the global economy and this ultimately has a knock on effect on the Australian economy and the Aussie dollar.

Manufacturing numbers from the Purchasing Managers Index have disappointed the markets once again and any further deterioration could see Australian dollar exchange rates come under renewed pressure. Services data on the other hand also from the Purchasing Managers Index survey have been steady giving some hope for this sector. Any major market movement is likely to follow from any trade agreement that is reached between the US and Chinese leaders. There are reports that there may be a meeting between US President Donald Trump and Xi Jinping in Vietnam at the end of February. A way forward to break the deadlock in trade negotiations could prove very beneficial for the Australian dollar.

For more information on the Australian dollar and for assistance in making transfers at the best rates of exchange then please feel free to contact me James at jll@currencies.co.uk

GBP to AUD Finds Support – 66 Days to Brexit (James Lovick)

The pound to Australian dollar exchange rates has found support over 1.80 on the back of the latest Brexit developments which have helped lift sterling. The Australian dollar has also come under pressure over ongoing concerns for the Chinese economy. Chinese Gross Domestic Product figures released yesterday exacerbated the situation after China reported its lowest growth since 1990.

As the second largest economy in the world any downturn in China is closely scrutinised by the markets and the Australian dollar is heavily influenced as a commodity currency. Considering the size of Australia’s export market to China then any slowdown in the Chinese and global economy will normally be felt in Australia too. The Australian dollar could now be set for a weaker period ahead especially if trade tensions between the US and China over trade continue. US President Donald Trump has called on China to “stop playing around” and do a trade deal.

Brexit meanwhile continues to bring uncertainty for the GBP to AUD pair. UK Prime Minister Theresa May updated the House of Commons yesterday signalling the next steps having been defeated on a historic scale last week to include returning to Brussels to seek a better deal. The Labour party have tabled an amendment to try and force a second referendum, what is often referred to as a peoples vote, something the Prime Minister is not supporting having highlighted risk to social cohesion. Potential government resignations have also been reported if ministers are banned from voting for any amendments aimed at stopping a no deal Brexit.

UK employment data are released this morning and any improvement in wage growth numbers are likely to be seen as welcome news for the economy and hence the pound. Market reaction is likely to be limited with bigger Brexit news. For the pound to move higher and break away for these lower levels there does need to be some certainly over Brexit and these next few weeks will likely create major volatility and potential opportunity as the exit date of 29th March approaches.

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

Will the slowdown in China put pressure on the Australian Dollars value?

The main news within the financial markets this morning is the release of 4th quarter Gross Domestic Product from China. The figure is followed closely owing to its importance, as the Chinese economy is the 2nd largest globally and GDP data measures economic output.

The figure released is 6.4% year on year in the forth quarter, and this was expected. The headlines will centre on the annual figure which is now officially 6.6% through 2018 which is the lowest figure on record since 1990, almost 30 years ago.

Now that the annual GDP figure has been released the concerns surrounding a slowing Chinese economy have been confirmed, and this could spell trouble for the global economy with economies such as Australia’s likely to feel the pinch considering the extent to which the Australian and Chinese economies are intertwined. The negative effects of the US-China trade war can now been seen so hopes of a deal being stuck will be a high as ever, and it’s likely that the talks could impact AUD exchange rates as AUD could react to US-China sentiments.

From the UK side, this afternoon could offer GBP exchange rates some direction as UK Prime Minister, Theresa May will announce the governments Plan B now that her deal hasn’t made its way through parliament. The pound has dropped off slightly at the beginning of this week which is likely due to the anticipation of what will be said later. For now, cross party discussions have come to a halt as the leader of the opposition, Jeremy Corbyn has stated that we won’t talk until a no-deal is ruled out.

I think that this afternoon’s announcement is likely to drive GBP exchange rates to begin with and that the Irish backstop will be a major talking point regarding the new plan.

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.

Sterling climbs as May’s Brexit deal is emphatically rejected

It’s been a volatile 24-hours for the GBP/AUD exchange rate, as the Brexit talks ramp up and the UK parliament decides how best in carry out the Brexit.

Late yesterday evening the UK Prime Minister, Theresa May’s Brexit deal was overwhelmingly voted against by Parliament. The amount of votes she lost by was in the top-end of expectations, as she lost by 230 votes with was a much larger number than many analysts had expected.

Since then, the leader of the opposition (Jeremy Corbyn of Labour) has called a ‘vote of no-confidence’ in the government which will take place this evening. May is expected to win as no members of her own government have announced that they will vote against her and the DUP Party of Northern Ireland has also offered their support.

Tonight’s vote at 7pm is the next step in the Brexit process that could impact the Pound’s value, but what happens next is now quite unclear. The existing government has 3-days to announce their plan-b which could also be a market mover, so if you wish to be updated in the event of a major market movement do feel free to register your interest.

The Aussie Dollar, like the stock markets in the region remain under pressure whilst we wait for more clarity on global growth and trade war concerns between China and the US. The GBP has regained a lot of ground against AUD recently and last nights vote has helped. The pair are currently trading in the 1.79’s so it will be interesting to see whether the pair will manage to break through the psychological 1.80 level.

Moving forward I expect to see the pair continue to be driven by Brexit related updates, although early tomorrow morning there will be a number of releases from Australia concerning new home sales and inflation data.

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 to AUD Exchange Rate Weakens after Chinese Yuan Strengthens (James Lovick)

The pound to Australian dollar exchange rate has fallen lower overnight with rates for the GBP to AUD pair falling to a low of 1.7653 this morning. As featured yesterday Brexit remains the dominating driver for the pound not just against the Australian dollar but against all of the major currencies. With Brexit appearing to be in stalemate and the continued pressure from opposition parties to seek other options such as a second referendum, general election or cancel Brexit, the list goes on; the uncertainty is putting added pressure on sterling exchange rates. The weekend will inevitably see all the big political beasts doing interviews with the political shows on the TV. Any clues as to what may happen next week could see a volatile start to next week ahead of the crucial parliamentary vote to be held on Tuesday.

As things stand the government is widely expected to lose the vote in the House of Commons on Tuesday. Following that she will now just have three days to return to parliament with a Plan B after she lost a vote in parliament this week which forces Theresa May to act swiftly. How Plan B might look is less than clear and the Prime Minister is reportedly keeping a tight lid on how things will play out from here. The lack of information would suggest a very volatile period for GBP vs AUD next week.

Whilst the pound is falling amidst Brexit uncertainty in these final stages of Brexit the Australian dollar appears to have been boosted following an appreciation in the Chinese Yuans value. As the Chinese currency strengthens this is often seen as good news for the Australian dollar which is a commodity currency and due to the fact China is one of Australia’s most important export markets.

The stronger Yuan is having a positive knock on effect on the Australian dollar. Chinese trade balance data released next week is a data release to pay close attention to as the markets have been showing serious concern as to the strength of the Chinese economy. The trade wars appear to be hitting China adversely and the Australian dollar is likely to be disproportionately affected by any changes in China.

For more information on the Australian dollar and for assistance in making transfers when either buying or selling Australian dollars then please contact me James at jll@currencies.co.uk

Will next week’s vote on May’s Brexit deal cause movement for GBP/AUD?

The Pound has been trading within relatively thin volumes this week against most major currency pairs as the currency comes under pressure in the lead up to next week. On the 15th of this month, which is next Tuesday there will be a ‘meaningful vote’ on Prime Minister, Theresa May’s Brexit plan and much of the speculation this week revolves around that date.

The Australian Dollar, despite being the biggest loser in terms of currency throughout 2018 of the G10 countries, has actually been increasing in value over the past week as hopes of a agreement between the US and China over the trade war talks increase. There have been ongoing discussions recently between the two leading economies, and this is a positive for Australia as China is the country’s main trading partner.

So far this morning the Pound has got off to a poor start, as pressure builds in the lead up to next week’s vote, especially after the first planned vote was delayed as May was concerned of a major loss. The latest Brexit related update is that yesterday evening Parliament voted in a new amendment specifying that the government has 3-days to report back to the commons with its ‘plan B’ in the event that May loses next week.

Economic data is taking a back seat at the moment owing to the importance of UK politics at the moment, but it’s worth being aware that on Friday there will be UK GDP figures released at 9.30am with growth of 0.1% expected. I would expect to see a drop in the Pounds value if this figure disappointing especially if the figure shows a negative figure.

If you wish to be updated and to plan around what could be a busy week for the GBP/AUD pair, do feel free to register your interest with us.

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.

 

US-China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Pound Value hinges on Brexit Deal

Brexit is anchoring the Pound against the majority of major currencies due to the lack of clarity surrounding Brexit. The current situation is not a good one, May’s deal in it’s current form seems to have little chance of being passed by parliament. The lack of faith in the deal going  through was the reason the vote has now been delayed. Parliament reconvenes on 7th January and the vote will be held on the week commencing 14th January.

The 21st January is the final date the government can release it’s withdrawal plans. The majority of the possible outcomes I would largely consider Sterling negative. Jean-Claude Junker, President of the European Commission has stated that the deal on the table will not be renegotiated and that Brussels are only prepared to clarify the current terms of the deal. In it’s current form the deal does not look like it will go through which would hurt Sterling.

If the deal does not go through it is likely May will face  a leadership challenge from Corbyn or May could resign,  if this was to be the case the further political uncertainty would hurt the Pound. If May is ousted a General Election will be on the cards which does not bode well, but does bring a second referendum back to the table. If a second referendum is announced this could be deemed as pound positive as polls suggest the UK public would now vote to remain in the EU.

A no deal scenario would be the most damaging for the Pound although I am not of the opinion the losses will be as severe as the Bank of England have been touting. Carney suggested there will be over a 25% fall in house prices and GBP/EUR could drop below parity.

US-China Trade War could be prolonged

The US-China trade war continues to weigh on investors mind and many have moved away from the Australian Dollar due to Australia’s heavy reliance on the Chinese purchasing it’s goods and services. The current 90 day truce is in place provided China come to the table to negotiate over their current economic model. I am doubtful any major concessions will be made and the trade war could be prolonged which will hurt AUD. We could see an escalation if sufficient concessions are not made with the US threatening to increase tariffs on Chinese goods by 25%. This would hit both economies hard and also would cause further global economic uncertainty. If it were not for Brexit I think we would be seeing gains for Sterling against the Aussie, but at present the lack of clarity surrounding Britain’s future is holding the pound back.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. 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.

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

US-China Trade War does not bode well for AUD (Daniel Johnson)

Prolonged Trade War could hit the Australian Dollar

Sterling remains fragile against the majority of major currencies due to the lack of clarity surrounding Brexit, I feel GBP/AUD would be even lower than current levels if it were not for the US-China trade war.

Australia is heavily reliant on China purchasing it’s goods and services and the trade war is causing a slow down in economic growth. China has being going tit for tat on tariffs with the US and despite the current pause the situation has the potential to escalate.

The onus is on China to get the trade war sorted as quickly as possible. The trade war is a threat to China’s already slowing economy, growth missed economist’s forecasts by 0.1% in the 3rd quarter landing at 6.5%. This is the weakest quarterly growth since 2008.

There is a disproportionate effect on China when compared to the US. China’s exports to the US amounts to a bigger section of the Chinese economy than the amount to which China-bound US exports represent to the US economy. In 2017 China exported USD 50bln of goods to the States form  a USD 12trn total. This is compared to the US who exported USD 130bln worth of goods to China from USD 19trln GDP.

At present there is a 90 day pause on tariffs which commenced at the beginning of December. The US has agreed to hold back on a 25% increase on Chinese products if China agree to negotiate making fundamental changes to it’s current economic model. A 25% increase is extremely high and would no doubt have a severe impact on both economies.

This does not bode well for the Aussie. If it were not for the debacle that is Brexit I think we would be witnessing the Pound strengthen against the Australian Dollar. Brussels have stated they are not willing to make any changes to May’s deal and it glaringly obvious it will not get voted through parliament in it’s current form. We could be looking at a leadership challenge for Corbyn or a no deal scenario which would both hurt Sterling even more. I feel a second referendum could boost Sterling as polls suggest voters would now wish to remain in the EU, I think May would have to go for this scenario to emerge.

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 help feel free to email me at dcj@currencies.co.uk.
Thank you for reading.