Tag Archives: australian

Australian Dollar still weakens as ASX falls due to U.S-China trade tensions

The Australian Dollar has had another fairly tough week against most major currencies, with the main reason being put down once again to the growing trade tensions between the U.S and China that do not appear to be going away soon.

These tensions are also weighing on the Australian share market, with commodities prices losing value the higher the tensions are.

U.S proposals are still not being taken well by China and the threats from China to take countermeasures are merely adding to global investors steering away from the perceived risk of the Australian Dollar and moving into safer haven currencies.

I have personally felt that the Australian Dollar would be in for a tough time for a while now, it is still managing to hold it’s ground at the moment with everything being taken into account, but I do feel that the issues with China will continue to weigh on the value of the Australian Dollar, not just the trade wars but also the growing levels of debt in the Chinese economy which have been a problem for quite some time now.

As many regular readers will know Chinese issues can impact the value of the Australian Dollar due to the sheer volume of goods and services that China import from Australia and also the huge amount of tourism that China provides to the Australian economy too.

All eyes will continue to be on Trump’s next move and also the U.S data release which is Non-Farm payroll data due out during trading on Friday. This release can impact global attitude to risk therefore can impact the value of the Australian Dollar too.

If you have a transaction to carry out involving exchanging Australian Dollars into any major currency, or buying Australian Dollars with any major currency then it would be well worth getting in touch with me directly.

You can contact me, Daniel Wright on djw@currencies.co.uk if you would like more information on how I can help you and I will be happy to get in touch personally.

Australian Dollar continues to lose value as inflation levels stall

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

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

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

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

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

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Australian Dollar weakens following RBA meeting minutes

Tuesday saw a fairly poor performance by the Australian Dollar against most major currencies, following the release of the RBA (Reserve Bank of Australia) meeting minutes from their last interest rate decision.

The minutes will basically show what was discussed at the meeting and how the RBA came to various decisions and i’m afraid the tone was fairly negative when reading through discussions and future fiscal plans.

The main areas of concern are the on-going trade wars between Donald Trump and China, as many regular readers of this site will be aware Chinese economic performance is fairly crucial to the performance of the Australian economy and the Australian Dollar. Not only do China import a huge amount of goods from Australia but they Chinese tourists make up a fairly large percentage of tourism in Australia.

The large sum of household debt at present in Australia is also of great concern to the RBA. Household debt is currently at worrying levels and what this means is that until this starts to drop back off it will be very difficult for the RBA to raise interest rates, and they did put a nod to this in the minutes.

Should they raise rates then we may see a large quantity of households go into default in Australia which would only escalate the economic problems even further, it does now appear that unless things improve then will not be seeing an interest rate hike for the foreseeable future which will more than likely hold the Australian Dollar back against other major currencies.

An interest rate hike is generally seen as positive for a currency and with other areas around the globe slowly raising their interest rates the Australian Dollar is in danger of being left behind.

If you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like assistance with developing your strategy then you are more than welcome to get in touch. I have been helping clients move money internationally for over a decade and will be more than happy to have a chat with you about your specific needs.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will get in touch with you personally.

Positive tone from the RBA leads to Australian Dollar strength overnight

The Australian Dollar has had a fairly solid 24 hours or so following on from the RBA (Reserve Bank of Australia) interest rate decision overnight.

No changes to interest rates were made and the interest rate level remained at 1.5% for the 23rd consecutive month, however it was the tone of the RBA that sparked the strength for the Australian Dollar against most majors.

The Australian Dollar has been one of the top performers of the trading day due to the outlook going forward. Currencies quite often move on speculation as well as fact, and many analysts had been expecting another fairly damp overview from the RBA meeting minutes.

What they actually received was a fairly positive report, citing that they now expect wage growth to improve and in fact that they felt that this had now troughed, and with reports of skills shortages in certain areas there is now an expectation from the RBA that wage growth will start to naturally rise and this should drag the economy up with it.

The Australian economy has had a mixed year so far, whilst there has been nothing to panic about the economic data that has been released has not exactly been fantastic, and throw into the mix the issues with Donald Trump with Trade Wars and the potential issue over North Korea earlier in the year and you can see just why the Australian Dollar has had a shaky 6 months.

Political tensions and larger global problems can also weaken the Australian Dollar as it is perceived as a ‘riskier’ currency, so global issues can decrease investors attitude to risk and therefore weaken the Australian Dollar when they occur.

There is little to come out in terms of Australian data in the coming days, but for those of you looking to carry out an exchange involving the Australian Dollar then non-farm payroll data in the U.S on Friday, which measure employment in America will be your next one to watch, as this can also impact global attitude to risk.

Should you need to carry out an exchange involving Australian Dollars and you would like to maximise your exchange then feel free to contact me (Daniel Wright) directly and I will be able to assit you with the timing of your transfer and ensuring that you get a great rate of exchange too. Feel free to email me on djw@currencies.co.uk and I will be more than happy to contact you personally to discuss the options available to you.

Australian Dollar still open to risk sell off – Italy key at present and Chinese data rounds off the week

Italian politics have been one of the surprise movers for Australian Dollar exchange rates so far this week, with news of a breakdown in talks to form a Government coming out earlier in the week this has led to a rise in political instability which can impact investors and speculators attitude to risk.

With the Australian Dollar being deemed as a ‘riskier’ currency it is open to the elements of global political and economic issues, so situations like the one in Italy at present or even the on-going situation between Donald Trump and North Korea can have quite an impact on the value of the currency.

In times of uncertainty the Australian Dollar tends to weaken and when matters are settled you can see the Australian Dollar get a little stronger.

As regular readers  of the site will be aware it does not look like we will be seeing a rise in interest rates for Australia in the coming months which may keep the Australian Dollar out of fashion for a little while, especially when you note that the Federal Reserve over in the U.S are consistently raising rates and have been for a while now.

An interest rate hike is generally seen as a positive for a currency as it makes that currency more attractive to investors and a cut in interest rates can been seen as negative, so with the action seen from the U.S over the last year or so we are witnessing a flurry of money out of the Australian Dollar and into the U.S Dollar which is perceived as a safer currency and now offers a better return as well.

We have minimal economic data out for Australia this week but we do have Chinese manufacturing tomorrow and Friday which may also impact the Australian Dollar as the week nears an end.

If you have a currency exchange to carry out in the coming days, weeks or even months ahead and you would like my assistance then I would be more than happy to help you personally. Not only can we better rates of other brokerages, well known apps or online platforms but we go the extra mile and offer assistance with both the timing of your transfer and getting the money where it needs to be safely and securely.

Feel free to email me (Daniel Wright) directly on djw@currencies.co.uk and I will be more than happy to get back to you with further information on our services.

Australian Dollar loses a little ground with economic data miss and Chinese debt still a concern for the RBA

The Australian Dollar lost a little ground in trading yesterday following poor construction data and concerns from the RBA over Chinese debt and the two together led to a drop in demand for AUD and a slight drop in value to go with it.

Construction work was 18% down on figures over the same period last year and only rose 0.2% for the quarter compared to expectations of 1.3% which is quite a big miss.

RBA Governor Philip Lowe remained firm that the RBA would not be in any rush to make adjustments to monetary policy anytime soon and he also commented that a clear build up of debt and bad loans in China is also a considerable risk to the Australian economy. He cited that there have been similar situations in the past that have led to economic slowdown or a full blown financial crisis.

China at present is a large importer of Australian food and service and Chinese tourists currently account for 25% of all tourist Dollars spent in Australian currently, not to mention China being a large importer of Australian iron ore and coal.

This news unnerved investors who are already getting mixed news regarding Donald Trump and trade tariffs  and are already looking to come out of the Australian Dollar due to stagnant interest rates where other seemingly more stable economies around the world (for example the United States) are making their moves and raising interest rates, even now to a point where the USD is a more attractive currency than the AUD as it offers a better return for investors money.

If you are in the position that you need to carry out a currency exchange involving Australian Dollars and you would like to be kept up to speed with any rate changes then you are more than welcome to get in touch with me and I will be  happy to help you personally. The brokerage I work for has been operating for 18 years now and we pride ourselves on getting clients not only the best exchange rates on the market but also offering the very highest level of customer service too.

If you would like to discuss a specific scenario or exchange with me then feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will be more than happy to get in touch personally.

Australian Dollar weakens a little as U.S Bonds continue to rise – Poor wage growth continues to be an issue

The Australian Dollar has lost a little ground in trading this week with U.S Bonds being partially to blame for the latest bout of Australian Dollar weakness. The U.S treasury yield has recently hit its highest level in 7 years and the reason this is impacting the Australian Dollar is that this is causing a large flow of money to come back out of the Australian Dollar and into the U.S Dollar, making USD more expensive to buy and AUD a lot cheaper.

Over the past few years we have seen interest rates continue to rise in the U.S and remain stable in Australia and now that the USD is seen as a more attractive and less risky investment investors are starting to make their moves and to shift money back into the Dollar.

It does not look like we will be seeing a move from the RBA to raise interest rates until next year now which in my opinion will continue to hold the Australian Dollar back. Poor wage growth figures matching the 1.9% inflation figure released have shown that workers have not seen any growth in their wages for the past year and wage growth levels are currently sat very close to historic lows.

What this means is that the general consumer has less money in their pocket to spend and therefore this can impact the economy further. It also will hold back the Reserve Bank of Australia from raising interest rates as a move to hike rates now would put homeowners under pressure, so they really are stuck at the moment as to what is the right thing to do.

I believe the RBA will continue to monitor data before rushing anything, but the signs are there for me that we may see a little Australian Dollar weakness in the coming months.

If you are in the position that you need to carry out a currency exchange involving Australian Dollars and any other major currency then you are more than welcome to get in touch with me and I will be  happy to help you personally. The brokerage I work for has been operating for 18 years now and we pride ourselves on getting clients not only the best exchange rates on the market but also offering the very highest level of customer service too.

If you would like to discuss a specific scenario or exchange with me then feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will be more than happy to get in touch personally.

Australian Dollar predicted to fall throughout 2018

Those of our regular readers hoping for a higher Aussie Dollar will be aware of how its upside is currently limited, and how the the US Dollar is partly behind the softening Australian Dollar.

The most simplistic way of looking at it, is that now the US Dollar is in many cases offering a higher rate of return than the Australian Dollar, investors are more likely to hold funds in that currency as opposed the the Aussie. Previously AUD offered one of the highest rates of return within the developed world and that resulted in a strong Aussie Dollar.

The issue now is AUD has a long way to fall if it’s to return to more familiar trade levels when we consider historical levels, which is perhaps why some predict to see it continue to fall. To put the US Dollars increased attractiveness into perspective, the US Dollar Index (which measures the US Dollars performance against a number of major currency pairs) has risen 3% since April the 16th. A clear indication of how investors are pooling funds into the currency.

The Reserve Bank of Australia on the other hand is adopting a different approach to the Fred Reserve Bank in the US. There are no interest rate changes from the RBA expected until next year, which is perhaps another reason that some economists are expecting to see the Aussie Dollar fall.

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.

RBA interest rate decision- Rates look set to continue on hold for the foreseeable future

If comments from the RBA last night are anything to go by it does look like we may be set for stable interest rates for the foreseeable future, despite the fact that we have had a record breaking period of policy stability in recent times.

For the last 19 meetings we have seen no rate movements which now dates back to a stable interest rate since August 2016, in the meantime we are starting to see interest rates for other economies around the world begin to rise, which is why the Australian Dollar has weakened against a number of major currencies over the past year or so.

For those that are not aware an interest rate hike is generally seen as positive for the currency concerned as it will make that currency more attractive to investors, so due to the fact that we have not seen a rise in rates and one does not appear to be on the cards the Australian Dollar has started to lose value, making it cheaper to buy.

Until the RBA gain more confidence in wage growth  and labour market conditions in general then I feel that they will not budge on their stance, they admitted today that employment growth has slowed and that this is one of the reasons why they are still approaching any rate changes with caution.

Some analysts are now predicting that we may not see a move from the RBA until 2020 at the earliest, and with this in mind I personally feel that the Australian Dollar may be set to struggle in the months ahead, especially if you add into the picture falling commodity prices and a lower attitude to risk from investors at present.

If you have the need to make a large currency transfer involving the Australian Dollar, either buying or selling and you would like my assistance both with the timing and achieving the best rate when you come to lock in your rate then you are more than welcome to contact me personally.

You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you need to do and I will do my best to help you.

Interest rate hikes look extremely unlikely

For the first quarter of 2018 Australian core inflation hit 1.9% and headline inflation was 0.4% down 0.6% from the final quarter of 2017. The quarterly inflation numbers support the Reserve Bank of Australia’ stance to keep interest rates on hold for the time being. Many economists are suggesting a hike for the RBA will not materalise until the summer of 2019 and I have to agree which is a problem for Australian dollar sellers.

An interest rate hike has the potential to collapse the property market as many Australian’s have 0% mortgages and others have properties that they struggle to pay for now due to property prices rising over the years. My personal opinion is that average earnings need to rise and inflation would have to become out of control before a hike materialises.

As it is Anzac day tomorrow there are no data releases to look out for tomorrow. The next batch of releases to look out for are import and export price index numbers and both are set to show a steep decline. If this is the case you would expect the Australian dollar to come under pressure further.

In regards to GBPAUD exchange rates, with exchange rates now remaining buoyant above 1.80, the golden question is what is next? UK MPs are set to meet in the house of commons on Thursday to discuss the customs union. With MPs split whether to leave and remain and the PM stating there is no choice the UK has to leave this story could put pressure on the pound.

If you are trading Australian dollars this week, month or year I would recommend emailing me with the the reason for the transfer (company goods, property purchase) and your timescales and I will response with the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage, I would strongly recommend you compare rates as I am confident I will be able to offer you additional savings with your transfer. All you need to do is email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **