Tag Archives: australian economy

Will GBPAUD keep on rising?

The pound to Australia dollar rate has been moving higher on the back of the latest improving economic data for the UK and fresh fears over when the RBA (Reserve Bank of Australia) will raise interest rates. We could see the Federal Reserve in the US raising rates which has been a big driver on Australian dollar exchange rates. The strengthening of the US dollar has seen a weaker Australian dollar as they are closely linked.

Any weakening of the Australian dollar lately can be partly attributed to the scaling back of interest rate expectations for the Australian economy. Overall the predictions for the Australian economy had been very strong and this had seen the Aussie stronger. This has been scaled back recently with the Aussie weakening as the RBA scaled back their forecasts.

The US dollar is also a factor as it has been rising, it is looking more than likely that the US will raise their base rate which will see the US dollar stronger. As a higher yielding currency the Australian dollar has been very popular but now the US dollar is challenging its dominance. The market is now bracing itself for lower for longer Australian interest rates which is why the currency has weakened.

with sterling finding some support this trend could continue for longer, the conditions that have created it don’t appear quite ready to subside. For now it appears this market will favour Aussie buyers and any clients looking to sell Australian dollars for pounds might need some assistance with strategy.

If you have a transfer to make buying or selling Australian dollars then please don’t hesitate to let us know so that we can monitor the market and update you on the latest strategies to be aware of in trying to maximise your transfer. If you wish for more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

 

 

GBP/AUD Forecast – RBA Keep Interest Rates on Hold (Matthew Vassallo)

The Pound found some much needed support during trading today, with news overnight confirming the Reserve Bank of Australia (RBA) had kept rates on hold.

This decision was expected and likely factored in by investors to the current market price but it was likely recent comments by RBA members, which has kept investor confidence in the AUD at a minimum.

They confirmed that the RBA were unlikely to raise rates until 2019, news which sapped investor confidence in the Australian economy.

GBP/AUD rates moved back above 1.72, hitting 1.7227 at today’s high.

This move was most welcome by those clients holding the Pound following last week’s slide, which came about after the Bank of England’s (BoE) interest rate decision and the subsequent statement by governor Mark Carney.

Despite the central bank raising rates for the first time in 10 years, it is likely that investors had almost fully factored in the 0.25% hike.

The reason for the Pound then dropped sharply, is a likely reaction to Carney’s subsequent statement. He remained fairly downbeat about the UK economy and emphasized the negative impact any further rate rises could have, whilst Brexit negotiations were on-going.

If you combine this with the negative perception already engulfing the UK at present, and the Pound was always likely to sustain a major upturn.

Therefore, even a relatively small spike, such as the one we have seen today should be considered a positive for those clients with a Sterling currency requirement. I do not believe that the Pound can sustain any aggressive increases towards 1.80 against the AUD, particularly in the short-term.

The UK’s economic outlook remains relatively bleak and with so many unanswered questions surrounding Brexit and which direction the UK economy will take following our on-going separation from the EU, are you prepared to risk further losses for perhaps only marginal gains?

If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

AUD Forecast – Sterling Spikes Ahead of BoE Interest Rate Decision (Matthew Vassallo)

GBP/AUD moved back through 1.72, with the Pound finding support ahead of Thursday’s Bank of England (BoE) interest rate decision.

Many clients will now be questioning their next move but personally it may be wise to consider any upcoming Sterling exchange ahead of Thursday’s decision.

I believe a small rise in interest rates (up to 0.25%) has already been factored into GBP/AUD current value and whilst you may see a small upturn should the aforementioned hike occur, it is unlikely to be overly aggressive.

I feel that whilst market perception around the UK economy remains minimal, any rises in the Pound’s value, however marginal, should be considered a positive and clients holding Sterling need to consider their position accordingly.

Looking at the Australian economy and a report yesterday made for interesting reading. It is now over 25 years since they faced a recession, the longest run in any developed nation.

Whilst many others have faltered, Australia seems to have weathered the storm but could things be about to change?

The UK economy as we well know is facing a long road to recovery, as we try to navigate our separation from our EU neighbours and despite some support for the Pound of late, the UK is without doubt fighting an uphill struggle as it tries to adapt to its new surroundings.

The Pound has lost value against the AUD for much of this year, with GBP/AUD rates hitting 1.64 only a few months ago, before its upturn back to the current levels.

The Australian economy on the other hand has continued to perform relatively well but those clients holding AUD need to remain cautious, as a senior economist admitted in the report, they “have been riding their luck to some extent”.

Australia’s economic prosperity is for the most part driven by the export of their vast supply of raw materials. This is mainly iron ore and liquified gasses, which are then shipped to China their main trading partners.

They have also benefited from a booming property industry, driven by low interest and easy credit. A high influx of immigration has also helped to drive their economy forward, whilst others have faltered and this has all combined to help support headline growth.

However, looking more closely and these factors have helped mask other economic short-comings, in particular a flagging Manufacturing & Production industry. This was once the envy of other nations but aging, high-cost infrastructure has slowed these sectors dramatically.

If these economic problems were to manifest themselves, then the current value against Sterling could look extremely attractive in the future and as many are predicting, the bubble must burst at some point.

Brexit negotiations remain stagnated and this is helping to inadvertently boost the AUD’s value but were they to take an upward trajectory, the Pound could fine support and a move back towards 1.75 is certainly not out of the question.

If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

GBPAUD rises on Australian Inflation data!

The Australian dollar has weakened in overnight trading as uncertainty over the Inflation outlook for Australia shifts which has raised concerns over when the Australian Reserve Bank (RBA) would raise interest rates. This is presenting a very interesting short term opportunity to buy Australian dollars which may not last. This morning at 09.30 am is UK GDP and then next week the Bank of England decision which could see the pound slide further, there is of course no guarantee of this but it is a real possibility.

Overall the pound seems like it will lose value in the coming weeks as Brexit uncertainty continues to be a thorn in the side of the pound. Economic data is also starting to suffer so if you need to buy Australian dollars getting something changed on any spike higher seems to me the safest bet. The Aussie is much stronger against the pound because markets are bracing themselves for an interest rate hike longer term, whilst this might have taken a minor step back on the Inflation data overnight, it is still the central element of most forecasts.

Combine the longer term rate hike down under with the uncertainty of politics and economic data in the UK and we can sketch out a fairly concerning scenario for AUD buyers with pounds. If you have a transfer to make in the future buying or selling Australian dollars, making some plans around this latest shift in the market is very sensible. Overall there is a very strong belief that further volatility exists up ahead, it should not be taken too much for granted the Bank of England will raise rates next week and the pound will rise.

Thank you for reading and if you wish to discuss or run through the market please do not hesitate to get in touch with me Jonathan by emailing jmw@currencies.co.uk

Sterling loses further ground on the Aussie Dollar, will GBP/AUD fall back into the early 1.60’s? (Joseph Wright)

The Pound has fallen across the board of major currency pairs today, after some disappointing Retail Sales figures got the Pound off to a slow start.

The rate of inflation increasing to its highest level in 5-years along with wages struggling to keep up has been in the financial news recently, and applying pressure to the Pounds value.

The negative effects of the reducing purchasing power of the UK consumer is beginning to show, as today’s Retail Sales figures demonstrated that year-on-year sales in the UK retail sector are slowing, and on a monthly basis the figure for sales is now negative.

Many had hoped to see the Bank of England look at hiking interest rates in order to stem the issue, although hopes of a rate hike in early November have fallen this week after the BoE governor Mark Carney was quite dovish in his speech earlier this week.

Personally I think there could be a small hike in November but I don’t expect to see this push the GBP/AUD rate back above 1.70, as the pair have already fallen some distance since hitting last months highs when the rate hike was first discussed by the BoE.

Aside from the above issues I expect to see Brexit negotiations and how they’re unfolding continue to impact GBP rates across the board, and if you would like to be notified if there are any short term price changes for the Pound do feel free to register your interest with me.

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 Forecast – Political Fears and Uncertain Economies (Matthew Vassallo)

GBP/AUD rates have been floating around 1.70 for some time now, with the Pound struggling to make any significant impact above this threshold.

Sterling’s resent woes have been well documented, with political infighting dividing the ruling Conservative party and a seemingly clueless Brexit strategy increasing pressure on the UK economy.

Whilst UK PM Theresa May struggles against a growing tide of public negativity, any improvement in market perception and ultimately investor confidence, is likely to hinge on a breakthrough in Brexit negotiations.

However, those clients holding AUD need to remain cautious due to a worrying undertone in the Australian economy. Despite the country not entering into a recession in over 26 years, this figure flatters to deceive somewhat.

Reports this week have suggested that the Australian economy is still far too reliant on “houses & holes”.

This references their typical business cycle, where economic prosperity is driven by the export of their vast supply of raw materials. This is mainly iron ore and liquified gasses, which are then shipped to China their main trading partners. At other times low interest rates and easy credit can boost house prices and when you combine this with the highest population growth in the developed world, it can help to prop up headline growth.

This in turn can mask other economic short-comings, in particular a flagging Manufacturing industry. This was once the envy of other nations but aging, high-cost infrastructure has slowed this sector dramatically.

If these economic problems were to manifest themselves, then the current value against Sterling could look extremely attractive in months, or even years to come.

Brexit negotiations remain stagnated and this is helping to inadvertently boost the AUD’s value but were they to take an upward trajectory, the Pound could fine support above 1.70.

If you have an upcoming Sterling or AUD currency exchange to make, then we can help guide you through this turbulent market

Our award-winning exchange rates and 18 years of experience, has helped our clients achieve the most from their currency exchange, regardless of the market conditions.

If you would like a live quote on any exchange, or simply wish to be kept up to date ahead of any currency transfer then feel free to call 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

Is the Aussie Dollars bullish run coming to an end? (Joseph Wright)

The Pound is continuing its recovery against the Aussie Dollar, with the rate rising above the 1.70 mark once again and this time almost hitting 1.72 at its highest point during today’s trading session.

I believe this change in direction for the pair can be put down to both Sterling strength as the pound is also putting in some strong performance against other major currency pairs. This is likely due to Brexit headlines and uncertainties not being in the spotlight which has been a welcome change for those hoping to exchange their Pounds at more competitive levels.

The upward movement for GBP/AUD has also been aided by the weakening Aussie Dollar which had previously been one of the strongest performers of the year.

The drop in the Aussie dollars value can be put down to a slowdown in Chinese growth, falling commodity prices such a iron ore which is key for AUD, and also talk of the Reserve Bank of Australia not planning on hiking interest rates until 2019 which is in start contrast to the Bank of England who have alluded to hike as soon as next month.

Tomorrow morning there will be a key data release out of the UK as UK GDP will be released around 9.30am. If this figure deviates from the expectation we could see further movement, so feel free to get in touch with me if you wish to be kept updated regarding this release.

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 Rallies Against the AUD – Will the BoE Hike Interest Rates? (Matthew Vassallo)

The Pound has rallied against all the major currencies, including the AUD, following comments last week from the Bank of England (BoE) regarding a prospective interest rate hike.

With November touted as a possible timeline for this, the markets reacted positively with GBP moving above 1.70 against the AUD.

The AUD has found some support over the past 24 hours, moving back below this threshold but the gloom around the UK economy has lifted slightly following last week’s announcement.

Personally, I would be wary about taking the prospective rate rise as a given, as it was only last month that BoE governor Mark Carney stated that the central bank would not be raising rates whilst Brexit negotiations were on-going. The reasoning behind this was due to the huge amount of uncertainty currently surrounding the UK economy and its future prospects following our separation from the EU.

Rising inflation levels are the potential trigger behind this change in stance but I’m still not fully convinced that the BoE will act unless absolutely necessary.

Any clients holding Sterling should be looking for short-term opportunities, rather than gamble on longer-term sustainable gains and as such the current market price looks appealing.

Looking at the Australian economy and last night’s Reserve Bank of Australia (RBA) minutes suggested s steady increase in the jobs market. Despite an upturn in this sector wage growth and household debt remain a concern. Therefore, all signs point towards the RBA leaving their base rate of 1.5% on hold for the foreseeable future.

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.

A strong AUD relies heavily on the export of Australia’s vast supply of raw materials to China, so any clients looking to buy or sell AUD should have a strong interest in Australia’s monthly trade balance figures.

If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

Pound to Aussie Dollar rate hits an 8-week high after Bank of England hints at a rate hike, will this upward trend continue? (Joseph Wright)

The Pound rose sharply today against all major currency pairs after comments from the governor of the Bank of England buoyed the markets.

Up until lunchtime today it had appeared that the Bank of England hadn’t planned on hiking interest rates in the UK until 2019, but that changed this afternoon after a number of comments from Mark Carney (the governor of the Bank of England) hit the financial headlines.

After a higher than expected inflation figure earlier this week, the Pound had climbed slightly on hopes that the BoE would act sooner, and today those hopes materialised which is why we’re seeing the Pound climb so steeply.

Generally speaking, an interest rate hike is considered a positive for the underlying currency in question, hence the sharp rise as the markets mere mostly shocked.

Carney stated that the possibility of a rate hike has increased, and that rates may need to be adjusted in the coming months. He also stated that that he was among the majority of the Monetary Policy Committee members that believe some withdrawal of monetary stimulus will be needed in the coming months.

With comments such as these I expect to see the Pound continue to climb from its current levels, especially if they continue and the rate hikes are carried out.

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 to Pound exchange rate drops as Australian GDP data disappoints, will there be a reversal of the AUD/GBP trend? (Joseph Wright)

The Australian Dollar has recently strengthened quite considerably against the Pound, although the trend has been reversed this morning after Australian GDP figures failed to impress the markets enough for the bullish run to continue.

During the second quarter of this year the Australian economy grew at a rate of 0.8% which was in line with what economists were expecting, and it appears that the Aussie Dollar will need some more positive data to come out in order for the currency to once again reach its post-Brexit vote highs.

The Pound has been coming under pressure in recent weeks after fears surrounding the final ‘Brexit Bill’ cost have surfaced, as well as uncertainty surrounding how the Brexit negotiations are going so far with some suggesting they have got off to a bad start.

Yesterday data out of the UK showed that the services sector within the UK has hit an 11-month low which is important sector for the UK due to it accounting for around 80% of the UK economy. Despite this negative news the Pound is still climbing against the Aussie Dollar which to me demonstrates that the Aussie Dollar bullish run is potentially coming to an end.

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.