Tag Archives: australian economy

Sterling climbs against the Aussie Dollar as the RBA warns of strong currency putting pressure on Australian economy (Joseph Wright)

The Pound to Aussie Dollar exchange rate hit 1.66 in the early hours of this morning, and this was the first time in over 2-weeks that we’ve seen the Pound trade this high.

The headline comments from the Reserve Bank of Australia in the early hours came in the form of a warning, saying that the ‘Aussie’s recent strength has been placing pressure on the Australian economy’ and this resulted in the selling off of AUD.

The RBA appears to be fairly neutral in its outlook for future growth after suggesting that forecasts for the Australian economy remain unchanged (currently at 3% annually).

The fall for the Aussie dollar came after data showed that sentiment within the Manufacturing sector strengthened, along with the positive move of 7% increase in the value of Iron Ore which has given AUD a boost.

It appears that the RBA would prefer a weaker Aussie Dollar and I think that those planning on converting Aussie Dollars into Pounds should consider the gains they’ve seen recently, and whether they think the Aussie can continue to strengthen at its current rate.

This Thursday is likely to be a busy day for Sterling exchange rates as a whole and I expect to see the GBP/AUD rate see volatility. Thursday is being billed as ‘Super Thursday’ and if you would like to discuss why in future detail do feel free to get in touch.

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.

 

Political and Economic uncertainty weigh down the Pound (Daniel Johnson)

GBP/AUD – Will Sterling’s woes continue?

The pound has had a terrible time recently, GBP/AUD currently sitting at 1.6408. A small increase in GDP this week did little to bolster Sterling’s position. There are many reasons for Sterling’s weakness and I am struggling to find any reason for the pound to rally. The vote to exit the EU is having a huge impact on the UK economy. UK Inflation has been on a rising increase of late, reaching a high of 2.9%. If the rise continued there was potential the Bank of England would increase interest rates. Several members of the Monetary Policy Committee changed their stance and voted in favour of a rate hike. The rumours of a hike caused a short lived spike for the pound, however more recent inflation data saw a fall to 2.6%. With the chance of a rate hike now dashed, the pound fell in value against the Australian Dollar.

I believe a rate hike is not the solution to increase in inflation and the recent dip is a positive thing bringing us closer to average wage growth at 1.8% . There is a close correlation between average wage growth and inflation. Imported goods are more expensive due to the weak value Sterling the price increase is now being passed on to the consumer. Provided consumers still consider to spend this is fine, if they do not however the UK economy could be in serious trouble. Historically, political uncertainty weakens the currency in question and fifteen members of the conservative party have recently given a vote of no confidence regarding May’s position as PM. We need a stable government in place in order for the pound to rally against the Australian Dollar. Inflation has fallen on the other side of the pond and this is detrimental to the Aussie, but nothing that will weaken it considerably.

Brexit Talks a key factor on GBP/AUD buoyancy levels

Compromises will have to be made and the “have your cake and eat strategy” will have to be dropped.  Immigration laws need to allow the freedom of movement of people if there is to be access to free trade and this kind of defeats one of the main reasons  .This goes against one of the main reasons that voters chose to leave the EU  and would cause public uproar. Which is why I think compromises will be made, do not think these will happen quickly however it is likely to happen over time to soften the blow to those who voted to leave.

If you have a currency trade to perform I will be happpy to help. It is vital to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have confidence knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Will the GBPAUD rate rise or fall?`

The Australian dollar has been strengthening lately as investors predict that it will be sooner than later the RBA (Reserve Bank of Australia) has to raise interest rates. Where the RBA had previously been adopting a ore neutral stance which had see the Aussie weaker for part of 2017, the expectation is now for the to raise rates in the future. What this means is that the Australian dollar could strengthen even further and we could see rates to buy Aussies with pound getting more expensive. If you need to buy Australian dollars with pounds or even sell AUD for sterling understanding the market and your options in advance is key to maximising the position.

Expectations for the AUD to rise even further against the pound do seem likely but at the same time it would not be all too surprising to see the currency soften now. For Australia to raise interest rates they have to consider the negative impact on the Australian dollar since as a net exporter (they sell more overseas than they import) it is not good for the country to have an expensive currency. They want a weaker currency to encourage inwward investment and stimulate the economy.

Raising interest rates could easily cause the currency to weaken since with their base rate currently sitting at 1.5% it represents a very good investment compared to other currencies to invest in. Therefore I believe if you have a transfer to consider whilst the rates are uncertain you should be looking to make sure you don’t take too much risk and suddenly find the rate has unexpectedly become more expensive.

If you have a transfer to make current levels to buy pounds with Australian dollars are much improved from the last few weeks but this might not last. And for Aussie buyers the outlook is still shaky and we could easily see rates sub 1.60 once again. For more information on the best way forward with your transaction please speak to me Jonathan Watson by emailing jmw@currencies.co.uk to get a fresh overview of the market and analysis of the best way forward.

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

Reserve Bank of Australia appear unhappy with ‘overvalued’ Australian Dollar, will they take action? (Joseph Wright)

The Aussie Dollar has not only gained a substantial amount of value against the Pound in recent months, but also against most other major currency pairs.

With the Reserve Bank of Australia (RBA) already suggesting that there will be no further interest rate changes this year, they now have the issue of an overvalued currency which is a negative for an economy like Australia’s due to it being so heavily export driven.

The reason the RBA is unlikely to amend the interest rate is due to fears of a heavy impact on the already overheating housing market, as making mortgages easier to come by would most likely cause even further issues for house prices down under and especially on the East coast.

The Australian Dollar is now this year’s best-performing major currency so those looking to exchange AUD into another currency should bear this in mind.

Moving forward I think there’s a chance that we could see members of the RBA attempt to jawbone the currency as they will be looking to keep Aussie exports competitive.

The Pound is coming under pressure as Brexit negotiations take place this week in Brussels, and I think there is always the chance of a update on these which could move the markets.

If you have a 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.

Austalian dollar soars against sterling (Dayle Littlejohn)

Earlier this morning the Australian dollar spiked against sterling by over 1.5%, when the Reserve Bank of Australia released their latest minutes. Investors piled into the Australian dollar off the back of the news that the cash rate could increase to 3.5% from 1.5% and not have a negative impact, which implies the RBA could also think about raising interest rates in the months to come.

Personally I think this is a spike in the market to take advantage of for Australian dollar sellers buying pounds as I believe the Australian dollar is overvalued. This is supported by the National Australian Bank who released an article last week with similar views. With the property market being over inflated in certain major cities (especially east coast), I find it difficult to see how the RBA will alter the interest rate.

If they make the cut this will entice people to take out larger mortgages where as a hike would strengthen the Australian dollar further and in turn have a negative impact on Australian exports.

Looking further ahead Australia are set to release their latest Unemployment rates and Employment change numbers Thursday morning. Unemployment numbers are set to slightly rise therefore some of the gains we have seen this morning could be reversed.

As for the pound UK inflation is released in 30 minutes. If the figure exceeds 2.9% this could put further pressure on the Bank of England to raise interest rates and again some of the gains for sterling buyers could be lost. To find out how the inflation numbers impact the market feel free to email me and I will let you know the outcome later this morning.

If you are trading GBPAUD 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 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! **

Will next week bring further movement for the GBP/AUD pair? (Joseph Wright)

Next week there are a number of key data releases out of both the UK and Australia, which could result in a move away from the current exchange rates available.

The Pound has been weakening in recent weeks after some disappointing data releases in a number of sectors within the UK, which is why I think those following the Pounds value against the Aussie Dollar as well as other major currency pairs should be aware of next weeks releases.

An already under pressure Pound could be put under additional pressure in the early hours of Tuesday morning at the Reserve Bank of Australia’s Meeting Minutes. A bullish RBA could result in further gains for the Aussie Dollar against Sterling which could push the AUD/GBP pair above the key physiological level of 0.60.

Then at 9.30am on Tuesday morning there will be an inflation reading in the UK, which is a key reading at the moment as the rate of inflation within the UK is currently above the Bank of England’s current target of 2%. I expect a low reading to result in Sterling weakness as it will decrease the likelihood of an interest rate hike in the UK in the short term future.

The is also an Inflation Report Hearing next week within the UK which could impact Sterling exchange rates for the aforementioned reasons.

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 Under Pressure Again! (Matthew Vassallo)

Sterling is under pressure once again, with heavy losses against all of the major currencies.

The AUD has gained almost two cents at the high since yesterday, with the GBP/AUD dropping to 1.6746 at this morning’s low.

Brexit fears and comments from two Bank of England (BoE) members, seems to have sapped the minimal market confidence that Sterling had started to rebuild.

This drop is a prime example of why clients holding the Pound should be looking to protect their positions wherever possible, as a sustained increase in value is highly unlikely in my opinion.

It feels as if Brexit is starting to take a vice like grip on our economy, which is in turn having a detrimental effect on Sterling’s value.

Add to this the current state of limbo surrounding UK politics and uncertainty over what agreement is in place between the Tories and the DUP party and you can understand why investor confidence in the UK is low.

We also had two members of the BoE speaking yesterday, neither of which even mentioned a prospective interest rate hike in the UK.

Considering the Pound’s recent momentum had been built around comments made by BoE governor Mark Carney, who alluded to the fact the central bank could raise rates, the mixed messages are hardly likely to assist any upturn for the Pound.

Looking at the Australian economy and there is a concern amongst some quarters that the current housing bubble is set to burst, which could put pressure on the AUD moving forward.

Being a commodity based currency the AUD relies heavily on global growth remaining strong and whilst the current climate is pushing investors towards the AUD and its higher yielding interest rates, any slowdown in its export sector will hit the Australian economy hard and the AUD will almost certainly suffer as a result.

Therefore, I would be keen to take advantage of the current sell prices, which are extremely attractive when you consider the history on the pair.

This will remove any uncertainty from what has become a very unstable market.

If you have an upcoming GBP or AUD currency transfer to make and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk.

 

Australian dollar overvalued? (Dayle Littlejohn)

In recent times major central banks including the European central bank, Bank of England, Bank of Canada and the Federal Reserve have been taking a hawkish approach and indicating that they could be raising interest rates in the near future. When a central bank raises interest rates we tend to see the currency strengthen as investors flock to the currency.

However the tone from the Reserve Bank of Australia was far from hawkish when they released their latest monetary policy decisions over a week ago. The National Australian Bank believe that the Australia dollar is overpriced at present and if the RBA gave a hawkish statement the dollar would be purchased further and therefore increase in value.

Looking further ahead the NAB believe the Federal reserve will continue to raise interest rates which will mean investment will leave the Australian dollar and strengthen the US dollar, and I have to agree with the predictions.

In relation to GBPAUD exchange rates I expect the Australian dollar to devalue slightly however the golden question is whether this will outweigh Brexit? I fear at any point Brexit negotiations could reach a stumbling block and therefore the pound would weaken dramatically.

If you are buying or selling Australian dollar 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 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! **

What factors could cause the Aussie Dollar to weaken? (Joseph Wright)

Last week the Pound found itself under pressure after a raft of bad data out of the UK has resulted in concerns in a slowing down of the UK economy.

Data showed slowdowns in the manufacturing, construction and importantly the services sector and although the readings were in line with previous readings when GDP is running at 0.4%, the economy is slowing as we enter the 3rd quarter which is a negative sign for those hoping the Pound will climb as the year progresses.

The Reserve Bank of Australia disappointed Aussie Dollar bulls and those hoping the Aussie Dollar will climb last week. Many had hoped for indications of future interest rate hikes from the RBA but these comments never came, with many analysts now confident of a rate hike this year.

The price of Iron Ore has firmed up recently offering AUD some support, but the mixed messages the markets are receiving regarding China’s economy (and whether or not the figures they release are 100% truthful) is likely to weigh on the Aussie Dollars value.

The issues surrounding the housing market overheating in parts of Australia is also likely to be a talking point, and it’s quick market movements that we can help our clients take advantage of in a number of different ways, so feel free to get in touch if you wish to discuss this in further detail.

If you have a 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.

Disappointing data this week results in the Pound weakening, is the UK economy slowing down? (Joseph Wright)

Throughout the week there has been a series of disappointing data releases out of the UK, along with data this morning from Halifax confirming that property prices within the UK have fallen by 1% with UK house price growth falling to a four-year low.

We found out earlier this morning that manufacturing production within the UK fell last month from the month before, whilst industrial production has also fallen on an annual basis.

The construction sector has also experienced a slowdown recently, and with the raft of bad data released this week it may leave many within the marketplace re-evaluating whether there is much of a chance of an interest rate hike this year.

Unicredit (a major Italian lender) this week forecasted a potential spike of up to 4% if there is a rate hike this year, although personally I cannot see this happening irrespective of the UK’s inflation levels and I think that the Pound to Aussie Dollar exchange rate is more likely to fall between now and the end of the year.

There is talk of a slowdown in the Aussie economy also, but with the UK entering such a crucial time with Brexit negotiations I cannot see Australia’s issues overpowering those of the UK.

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.