Tag Archives: bank of england

GBP/AUD – Breakthrough in Brexit Talks? (Daniel Johnson)

GBP/AUD – Reports yesterday emerged which indicate the EU could provide concessions on the Brexit deal. There could be the possibility that the UK  will have access to the single market for goods and services whilst opting out of the free movement of people. The UK would have to replicate all EU social, environmental  and customs laws.

We did see Sterling strengthen slightly, but firm news will be needed to see substantial gains. There is still the possibility of a “no deal” scenario which is keeping Sterling anchored against he majority of major currencies. Trade Secretary,  Liam Fox recently stated he believes there is a 60% chance of a “no deal” which hit the Pound hard.

The Reserve Bank of Australia (RBA) decided to keep interest rates on hold this week and the speech relating to the decision by RBA Governor , Philip Lowe was slightly pessimistic which would normally cause AUD weakness. This was not the case against Sterling however, Brexit uncertainty outweighed the poor monetary policy outlook from down under and Sterling continued to suffer. This is a very worrying market reaction and shows the lack of investor confidence in Sterling.

If you have a currency requirement I will be happy to assist. It is crucial 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 faith 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 Bank of England increase interest rates and what will happen to the Pound vs the Australian Dollar?

The big news this week for anyone looking to make a transfer with Australian Dollars and Sterling will be the latest interest rate decision due to be released on Thursday by the Bank of England.

The chances have been increasing recently that the central bank will be looking to increase interest rates in the UK as inflation still remains relatively high. UK mortgage approvals have also gone up recently with the number of approved mortgages having risen to a 5 month high combined with a 2 year high for consumer confidence.

However, I think there could be more reasons behind a rate hike than just inflation.

If we cast our minds back to what happened two years ago the Bank of England slashed interest rates very quickly after the Brexit vote in order to stabilise the economy and encourage consumer spending.

Therefore, I think an interest rate hike this week could happen in order to allow the BoE room to cut rates next year if the Brexit talks go badly and we are left with a ‘no deal’ situation.

Even if we do see a rate hike we may not see the usual increase in the value of the Pound vs the Australian Dollar as it will be the accompanying statement and press conference held by the Bank of England governor that will likely affect the value of the Pound vs the Australian Dollar.

Carney has often been a big critic of Brexit and warned that this could cause a lot of pressure on the British economy so I think the rate hike will be closely followed by a rather dovish tone and this could hold back any Sterling advances against the Australian Dollar.

If you would like a free quote when exchanging Australian Dollars or further information then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

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! **

Will the Pound hit 1.80 this week against the Australian Dollar?

After having a very good run against the Pound the Australian Dollar has started to weaken in the direction of 1.80 on GBPAUD exchange rates. The confirmation from last night’s RBA minutes showed that interest rates are likely to be kept the same for the foreseeable future as they are helping to keep the economy performing well.

This has caused global investors to sell the Australian Dollar in favour of the US Dollar as the US Federal Reserve has already increased rates twice this year and this is the seventh time since December 2015.

Over the years the Australian Dollar has had a very strong positive yield but in recent times owing to the pace of rates going up in the US this has caused problems for the Australian Dollar.

However, not only is keeping interest rates on hold causing a problem for the Australian Dollar they are also facing the effects of Donald Trump’s latest threats of tariffs on Chinese goods.

As China is such a large trading partner with Australia then any negative news will often result in Australian Dollar weakness and this appears to be happening at the moment.

Trump has asked US officials to create a list of US$200bn worth of imports from China which could result in a very large trade war between the world’s two strongest economic powerhouses.

The Australian stock market has felt the effects of the news and the Pound vs the Australian Dollar hit the higher level of the 1.79 region earlier on during today’s trading session.

I personally think we could see the Australian Dollar weaken further this week and I would not be surprised to see the Pound hit 1.80 over the next few days.

On Thursday the Bank of England will hold their latest monetary policy meeting and recently the split has been 7-2 in favour of keeping rates on hold but with UK Retail Sales coming out much higher recently could this change one of the MPC member’s mind?

If you have a currency requirement coming up and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Pound improves against the Australian Dollar after positive Services sector news

UK services sector data published this morning came out much better than expected and this has put an end to the Pound’s recent demise vs the Australian Dollar.

The sector rose quicker than expected during May which has given rise to a possible hint of an interest rate hike.

The PMI data hit a three month high at 54 compared to the previous month of 52.8 but at the same time the survey did suggest that growth could slow down later this year.

The good news for the Pound is that the services sector accounts for over three quarters of the UK’s economy but is this good news a temporary positive sign?

The uncertainty surrounding Brexit clearly is keeping the Pound under a lot of pressure against a number of different currencies and the EU withdrawal bill will be discussed next week and this could cause further problems for the Pound.

Personally speaking I cannot foresee an interest rate hike coming for the UK at all during the course of the year as we are still deeply involved with the Brexit talks so anything to rock the boat in terms of monetary policy is highly unlikely.

Also, with UK GDP only recently growing at its slowest growth in 6 years a month ago and with inflation falling I don’t think the Bank of England will have much appetite to change the status quo.

Friday could be the biggest day of the week for anyone with an Australian Dollar transfer to make as we start the day with Chinese Trade Balance figures combined with Chinese Import and Export data. Following this the latest NIESR UK GDP estimate for the last three months will also be published and if we see another negative release this could put further pressure on Sterling vs the Australian dollar.

If you would like further information or a free quote when moving Australian Dollars then contact me directly and I look forward to hearing from you. A quick email could save you a lot of money on your currency transfer.

Tom Holian teh@currencies.co.uk

 

 

Little reason for optimism for AUD buyers (Daniel Johnson)

GBP/AUD –  Sterling has lost significant ground against he Aussie of late. The buoyancy levels of 1.80-1.85 are gone. GBP/AUD currently sits in the 1.75’s.

This is predominantly due to Sterling weakness rather than AUD strength. There is little reason to be optimistic at present for Aussie buyers. The Brexit situation is likely to be drawn out and problematic, with votes on areas of the deal having to be passed back and forth between the House of Commons and the House of Lords for approval. Throw into the mix that many of those involved in negotiations have ulterior motives, seeking to fulfil there own agendas and Sterling could remain weak for the foreseeable future.

Economic data has also been appalling from the UK, particularly GDP which came in at 0.1%, the worst data release on GDP for over five years. The proposed interest rate hike from Bank of England (BOE) in May did not occur and I would be surprised to see one this year.

Australia is heavily reliant on China buying it’s raw materials, in particular iron ore and the US threatening to impose huge tariffs has the potential to slow Chinese growth which in turn will hit the Australian economy. China has agreed to purchase more than USD 200bn in goods and services from the US which has put a hold on the tariffs, the Aussie benefited as a result.

Current trading levels are poor for Aussie buyers, but it could get worse. I can appreciate the reluctance to trade due to the psychological aspect of trading at current levels when it was 1.84 only a short time ago, but believe me there is very little justification to get to those levels again in current market conditions.

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

 

 

US-China Trade War Truce bodes well for the Aussie (Daniel Johnson)

Halt on tariffs benefits the Aussie

There has been an ongoing trade war between the Chinese and the US following Trump’s appointment as President. He has a thinly veiled issue with the Chinese and is highly agitated at the amount of debt the US is in to the Chinese. His mantra is “make America great again” and he took fire at the Chinese by threatening to impose tariffs that were simply unrealistic, that would be detrimental to both sides.

These tariffs would impact Chinese growth and in turn hit the Australian economy. Australia is heavily reliant on China for the purchase of it’s raw materials, particularly iron ore. If the Chinese economy suffers due to Trump’s tariff s the knock on effect will impact the Australian Dollar.

The US and the Chinese have recently agreed to put a halt to the trade war under the premise that China will purchase USD 200bn worth of US goods and services. Following this announcement the Aussie strengthened significantly. In particular against Sterling, this news along with poor economic data and a very  poor interest rate forecast from the Bank of England (BOE) has caused the pound to lose nearly 10 cents against the Australian Dollar. It was only recent we saw GBP/AUD at 1.84, we were in the 1.76s during today’s trading.

When to move?

AUD Sellers- Take advantage of current levels, 1.80 is an incredible selling price, let alone 1.76. Keep in mind GBP/AUD was 2.20 pre Brexit and the Pound is chronically undervalued.

AUD Buyers – If you have to move short term I’m afraid 1.79 should be your new target, the 1.80 resistance point has now been broken.

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

 

Will the Pound increase towards the end of the week vs the Australian Dollar?

The Australian Dollar has improved vs the Pound during the last few days as political tensions between the US and China appear to be easing recently.

Previously, it was suggested that Australia could be caught in the middle of the trade wars between the world’s two largest economies and as Australia is heavily reliant on what happens with the Chinese economy this can often have a big impact on the value of the Aussie Dollar.

Longer term I still think the Australian Dollar will weaken once again as the economy is still rather fragile down under. Inflation is still below the required figure and the Reserve Bank of Australia have suggested on a number of occasions that they will be keeping interest rates on hold for the foreseeable future.

Meanwhile I fully expect the US to continue on its path of increasing interest rates during the course of 2018 and whilst growth continues to rise in the US I think this will cause global investors to sell off the Australian Dollar in favour of the US Dollar which will provide strong growth and a very positive yield.

This would typically cause the AUD to weaken against a number of different currencies including vs the Pound so I would expect the Pound to make gains in the medium to longer term vs the Australian Dollar.

In the short term the focus will likely turn to what is happening with UK economic data as data in Australia is rather thin on the ground this week.

Tomorrow morning UK inflation is due to be published and this has been a big factor in how the Bank of England has reacted recently as if inflation continues to remain high the general theory is that a central bank increases interest rates to combat high inflation and this would typically strengthen the currency involved.

On Thursday UK Retail Sales are announced and with the previous release having been affected by the ‘beast of the east’ I think we could see the data come out rather positively which could see GBPAUD rates recover towards the end of this week.

If you would like further information about what is happening with the Pound vs the Australian Dollar or if you’d like a free quote to buy or sell Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Wage growth puts further pressure on the RBA

This week Australia have released the latest quarterly wage growth numbers and Australian dollar sellers have been left disappointing. The consensus was for wages to have grown by 0.6%, however in fact wages had grown by 0.5% for the quarter. The poor wage growth numbers are keeping inflation beneath the Reserve Bank of Australia’s target which is directly having an impact on Australian dollar exchagne rates.

If wage growth numbers continue to dwindle along and inflation remains below the RBA target, policy makers will have no choice but to leave interest rates on hold at record lows and this is what many leading forecasters are predicting, which is no surprise. Speculators move their assets chasing higher returns of interest and with the US marching ahead and potentially looking to raise interest rate another couple of times this year investment is going to leave Australian shores and land in the US.

In regards to GBPAUD exchange rates the pound has been performing worse than the Australian dollar as exchange rates have dropped below 1.80. UK economic data has disappointing which has stopped the Bank of England from raising interest rates and the Brexit negotiations continue to weigh on the pounds value. Today UK Prime Minister Theresa May confirmed that the UK will release a whitepaper before the June summit which will outline the UK’s full position.

When the whitepaper is released this could have a clear indication about the future path of the UK and therefore GBPAUD exchange rates. If you are converting GBPAUD within the next 3 months this event should be monitored closely. 

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with the currency pair you are converting, your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

Strong oil prices offer the Australian Dollar a welcome boost, where to next for AUD exchange rates?

The Australian Dollar has been supported overnight, which will be a welcome relief for those hoping for a stronger Aussie Dollar as the AUD/USD pair hit an 11-month low just yesterday.

AUD exchange rates have been struggling this year as the global economy picks up and monetary policy around the world tightens. Now that the US Dollar offers a higher rate of return investors are keen to hold funds in USD as opposed to the AUD as not only do they get a better rate of return, but the USD is considered more of a safe haven currency.

GBP/AUD hit a post-Brexit vote high recently trading in the 1.85’s, although it’s since slipped from these levels and has fallen further overnight owing to AUD strength as stock prices rose and the value of oil is rising. With the Australian economy being export driven and dependent on trade with it’s nearby neighbors, this is a positive so AUD understandably gained off the back of it.

There could be a lot of movement for the Aussie Dollar against the Pound today, as there is a Bank of England meeting at midday. Although no interest change is expected, I think we could see movement if any further amendments are alluded to.

There aren’t any major data releases out of Australia before the weekend, but if you wish to discuss what events could influence the Aussie Dollars value over the next few weeks do feel free to register your interest.

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.