Tag Archives: australian dollar

Australian Dollar Weakens on Trade War Escalations (James Lovick)

The Australian dollar has come under a recent wave of pressure losing ground across most of the major currencies this week. The Aussie has lost more than 4% over the last month with a noticeable fall against the US dollar. The Reserve Bank of Australia (RBA) are keeping all option open with regards to interest rate policy and the wording of whether or not interest rates will rise or fall in due course. However the RBA Governor Philip Lowe has indicated that he expects rates to rise and this was made clear when he last spoke.

The reason for the Australian dollars weakness is most likely due to the trade war escalations between the US and China. Whilst I have previously commentated that trade links between Australia and China are very strong and that Australia could be shielded by protectionist behaviour the recent escalation in tariffs is now having a detrimental effect on some of the other commodity currencies such as the Aussie. There is currently a better opportunity to buy Australian dollars.

The concern is that if global growth slows due to a trade war then the riskier currencies likes the Aussie are likely to feel the full force of slower growth and should see their respective currencies weaken. For the moment it’s all eyes on these developments and Trump had really signalled that he would seek to impose another $100 billion of tariffs on Chinese exports if there was like for like retaliation. Expect more developments form this story and potentially additional losses for the Aussie.

GBP AUD

Brexit continues to be the main driver for GBP AUD exchange rates and should see a volatile period ahead with the EU summit next week. British proposals on the future relationship should be made public very shortly and are likely to appear after the EU summit. The response form the EU as to progress so far will be very important for the pound and any escalation in tensions or the
potential for a no deal scenario is likely to result in sterling weakness. There is still an excellent opportunity for clients looking to sell Australian dollars. In my view once a deal thrashed out then the pound should strengthen materially. Although there is a risk of a no deal scenario which would be sterling negative, in my view this does not seem the most likely outcome and I am bullish for the pound in the medium term.

To discuss how these events will directly impact on your own currency requirement and how to achieve the best rates of exchange then please get in touch with me James at jll@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.

Bank of England to influence GBPAUD exchange rates (Dayle Littlejohn)

Today the Bank of England are set to release their latest interest rate decision and this event has the potential to have an impact on GBPAUD exchange rates. At the beginning of the year the Bank of England were hinting that an interest rate hike was imminent and due to a poor run of UK economic data interest rates were kept on hold and the pound lost value against the Australian dollar.

Today looks like we will receive similar commentary as the latest Q2 growth figures were a mixed bag, wage growth construction output and industrial production all missed the consensus. Arguable the only recent economic data release that exceeded expectation were the retail sales numbers.

My personal opinion is that the vote will be split 7-2 in favour of keeping interest rates on hold, which will be a slight non event. However Governor Mark Carney will talk down the chances of a rate hike in the foreseeable future due to the recent flurry of economic data, Brexit negotiations and trade wars. Arguably there is a good chance that buying Australian dollars with pounds could come more expensive throughout the day.

If you are buying or selling Australian dollars in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk. If I haven’t covered your currency pair please outline the pair you are converting. 

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Australian Dollar Outlook Improves (James Lovick)

The Australian dollar could be set for a stronger period ahead following a series of better economic data helping support the Aussie. Unemployment data released this week arrived better than expected at 5.4% against consensus of 5.5% proving beneficial for the dollar. There is hope that the improvement in the labour market should start to feed through into higher wage growth which is something the Reserve Bank of Australian have been waiting for. The Aussie was also boosted on the back of higher consumer inflation expectations which are pointing to higher prices down under going forward. The data suggests that Australians expect prices for goods and services to climb higher and this is yet another key criteria the RBA are monitoring before any decision is made on potentially raising interest rates. Looking forward the dollar could see a better period ahead and clients looking to sell Australian dollars may see a good window to convert within the next couple of months.

Next week sees the RBA minutes for the meeting earlier this month and may offer clues as to the central banks thinking. Any suggesting the conversation is moving towards raising rates would be seen as good for the Aussie.

The US are widely tipped to impose more trade tariffs on China imminently and this could happen as soon as today. Australia for the moment appear to be relatively protected for this action due to the strong trade ties it has with China.

GBP AUD

There are two major drivers for the GBP AUD pair at present. Clients looking to buy or sell Australian dollars should be aware of the Bank of England meeting next week as any change of tact from Governor Mark Carney could see the pound react. Any suggestion a rate hike could happen in August is likely to see rates for GBP AUD rally. Perhaps more importantly the Brexit withdrawal bill goes back to the House of Lords on Monday after there has been some disagreement in government as to the final wording of the text. This could prove tricky for the Prime Minister and any political tensions here could see the pound come under pressure. My long term view of GBP AUD is for considerable strength so sellers may wish to strike whilst the opportunity is still there.

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

Brexit uncertainty continues to hurt the Pound (Daniel Johnson)

GBP/AUD – Sterling remains fragile due to the lack of clarity surrounding Brexit and poor economic data. If there is progress in Brexit negotiations expect the pound to rally. Unfortunately very little progress is being made. The current point of contention is the Irish border deal. At present Theresa May and David Davis are unable to even agree on a back up deal if a deal on the Irish border cannot be reached. Ideally they would like to have something in place before the EU summit on 28th June. The current situation does not bode well for Sterling.

Recent data releases continue to be poor, manufacturing data this week saw the biggest fall since October 2012 and GDP came in below expectations at 0.2%. Average wage growth also saw a decline, unemployment remained unchanged, but it is important to remember that zero hour contracts are not a stable form of employment.

I am of the opinion there is little justification for a rate hike from the Bank of England (BOE) in the coming months and would be surprised to see one this year.

Thing are not all rosy down under however. Australia is heavily reliant on China purchasing it’s raw materials, particularly iron ore. The ongoing trade war with China and US is a concern. If China’s growth drops, so will the demand for Australian goods and services which will hit the Australian economy and in turn the Australian Dollar.

There are economists with the view there is the possibility of a rate hike from the RBA this year. I am not so confident.

If you are buying Aussies GBP/AUD is currently range bound between 1.75-1.80. Aim for 1.77 + if you have to move short term.

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 Strength – Economic Outlook Positive

The Australian dollar is in a much better place at present finding considerable support including having made gains in excess of 3% against the pound in the last month. Australian Gross Domestic Product has performed very well climbing to 3.1% in the first quarter of 2018 which has restored some confidence in the Aussie. A small boost in global growth and specifically in the Chinese economy seems to be paying dividends for the Australian dollar and this rally may have further to go. Chinese retails sales data next week could create some market reaction and a strong number could prove beneficial for the Aussie.

As things stand the dollar has not been as adversely affected from the trade tariffs imposed between China and the US. The advantage for Australia is that it shares very close trade ties with China so unless a global trade war escalates that drags Australia in too then this relationship could in fact boost the dollar further. Clients looking to sell Australian dollars for pounds are seeing a much better opportunity to convert and may wish to consider taking the risk out of the volatile currency markets. Rates for AUD GBP are sitting at 1.7680 and are considerably better than the 1.85 highs seen in recent months.

Those clients looking to buy Australian dollars with pounds should pay very close attention to developments in British politics next week. The Brexit withdrawal bill is finally going to go through the House of Commons and will be voted on. If UK Prime Minister Theresa May is unable to push through her vision of Brexit should Conservative rebels vote against what was in the manifesto then this could spell danger For the Prime Minister and the government. Any vote of no confidence pushed by Labour could see major volatility for sterling exchange rates and major market reaction.

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

Australian Dollar after New Trump Tariffs (James Lovick)

The Australian dollar looks set for another volatile period after the announcement this afternoon for US tariffs to be imposed against the EU, Canada and Mexico. US President Donald Trump is moving forward with tariffs on steel and aluminium imports which could result in a trade war across the globe. The Australian dollar could see a period of weakness if this outcome materialises as the Aussie is a higher risk currency and generally performs worse in times of global uncertainty. Things could escalate quickly as the EU have made clear it will look to apply tariffs on American brands such as bourbon whiskey and Levi’s jeans. The US tariffs will take effect at midnight this evening so there could be some considerable volatility when the Australian markets open and a particularly volatile end to the week.

The Aussie did come under added pressure at the start of the week following developments in Italy which could have seen fresh elections. The outlook in Italy has improved throughout the week although it wouldn’t take much to see tension rise and an anti-establishment push from the two new parties seeking to form a government. Expect more uncertainty for EUR AUD on the back of developments in Italy.

Clients with a GBP AUD requirement should pay very close attention to what is happening in the UK with the ongoing Brexit. Whilst we may have been talking about it for over two years the process is about to become very interesting in these coming weeks as a vote on the Brexit withdrawal bill in the House of Commons approaches. There are whispers of a potential vote of no confidence in the government if UK Prime Minister Theresa May is defeated and this scenario could see major volatility for GBP AUD exchange rates. Clients looking to buy Australian dollars should plan around this event to avoid disappointment.

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

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.

Australian Dollar Wobbles on Geopolitical Concerns – US / North Korea (James Lovick)

The Australian dollar has seen another wobble after that has been a good performance from the Aussie over the last month. The Aussie has slipped lower on the back of developments stemming from both China and North Korea. The trade war between the US and China appeared to be cooling off which was working in the commodity currency’s favour although Trump was reported to have said that “There is no deal” signalling that there might not be an agreement on how to reduce the size of the US deficit with China.

There are mixed signals coming out of the US on this important matter and there did appear to be progress up until recently. The Australian dollar is directly impacted by these events as China is Australia’s largest export market and a slowdown in the global economy is generally seen as bad for the Aussie.

It’s not just the US China trade battle to consider though, US President Donald Trump has indicated the summit with North Korea may not happen with a strong chance that it won’t work out. These geopolitical concerns continue to have a negative impact on the Aussie so expect more volatility for AUD exchange rates in the coming weeks.

Selling Australian Dollars for Pounds?

Those clients with pending requirements should monitor developments in Britain over these coming weeks. I have posted previously that the House of Commons will shortly vote on the Brexit withdrawal bill that has been put forward by the House of Lords with a series of amendments. UK Prime Minster Theresa may does not have a sufficient majority to push through her vision of Brexit and if the amendments are defeated in the Commons then there could be a vote of no confidence in the Prime Minister. This could create considerable volatility for the pound on the back of political uncertainty. It could also end up in a general election.

Clients looking to sell Australian dollars could see some better opportunities around the corner although it is my view the Prime Minister may have a shot at putting pressure on other politicians who represent Leave backing areas of the country. If she is able to win votes from Labour politicians then she could sail through with her Brexit which could see the pound rally on renewed confidence. Clients would be wise to plan around this event in these coming weeks as there is a huge amount at stake on how this ends up for GBP AUD.

To discuss your currency requirement and for assistance to achieve the best rates of exchange then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Boosted on Employment Data (James Lovick)

The Australian dollar has been boosted following employment data which rebounded in April with another 22.6 k jobs added. Unemployment actually rose slightly to 5.6% from 5.5% although this was more to do with a higher participation rate and the markets appear not too concerned over this aspect. Australian consumer inflation expectations data also rose which is helping to support the Australian dollar. A higher level of inflation in reality would be one of the first triggers for the Reserve Bank of Australia to raise interest rates which lends support to the Aussie.

Rates for GBP AUD have fallen to below 1.80 creating a good opportunity to sell Australian dollars for pounds. Clients looking to convert from AUD into GBP may wish to consider taking advantage of the sudden improvement as the Australian dollar could find itself in deeper water depending on how events unfold with the trade tariff war between the US and China as well as more recent geo political risks in the Middle East. US President Donald Trump has only just pulled out of the Iran nuclear deal and there is likely to me a lot more mileage from this change.

Brexit is about to become hugely political and volatile for the pound in these coming weeks ahead of a vote in the House of Commons on a series of amendments put forward in the House of Lords. As of now a total of 14 amendments have been made in the Lords which will deliberately seek to keep Britain in a customs union. The risk for the pound is that there could be more political uncertainty that comes out of this if Theresa May is unable to get through her vision of Brexit in the House of Commons.

Should she lose the vote then we could be moving into general election territory or the prospect of a new Prime Minister. There could be some bumps in the road In the next few weeks which could create some better opportunities for those clients looking to sell AUD if political tensions escalate in the UK.

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