Tag Archives: bank of england

Australian dollar forecast : Australian dollar remains in the firing line!

The Australian dollar was always looking like it may struggle in the month of May, and so it has proved to be the case. A series of domestic and global events have all led to increased pressure on the Australian currency, as investors fear over the more immediate political and economic outlook.

On the side of the domestic issues facing Australia, there are numerous economic concerns including inflation being at a 16-year low with stagnating Unemployment a further concern. The Reserve Bank of Australia (RBA) has because of this been under pressure to cut interest rates and it is widely expected will cut at future meetings.

The raising and lowering of interest rates is a big factor in the strength and weakness of a currency, the current projection for lower interest rates down under will only serve to put more pressure on the currency in the future.

Politics is also key in Australia with the national elections due on the 18th May, there is a concern this could be a Labour government which would potentially see the Australian currency weaker. There has been a growing concern over the economic outlook and a Labour government and their spending plans could easily see a weaker currency.

Finally, the global events which are also concerns for the Australian dollar are numerous. This includes the trade wars between the US and China which could see the lack of any agreement weighing on global sentiment and hamper trade confidence in the global economy. As a global currency, the Australian dollar will weaken in times of uncertainty over the global economic outlook and the trade wars are a great example of this.

Moving forward, the Australian dollar looks like it will remain under some pressure and could easily weaken further. A sudden change in sentiment could easily develop however, and clients looking to predict and track movements on this currency should be aware of the potential for a sudden reversal.

To discuss strategy and ensure that you are fully up to date with the latest trends and themes in the market, please don’t hesitate to contact me Jonathan Watson to discuss further on jmw@currencies.co.uk.

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

Australian dollar forecast : Will the Australian dollar rise or fall in May?

My view is that the Australian dollar could be on the back foot now as investors become more concerned about the RBA (Reserve Bank of Australia) cutting interest rates. The RBA will meet next Tuesday and there are some who think there is an increased chance of an interest rate cut, owing to some lower inflation numbers released in April. We also have the Australian election due on the 18th, the Australian dollar could therefore be in for a busy month.

The RBA has been in a holding pattern on interest rates for quite some time despite various changes in sentiment since 2016 when the RBA last cut rates. There has been continued speculation the RBA would need to cut again following increased concerns over the economic outlook in Australia, following the trade wars between the US and China.

With the trade wars concerns gently fading under the impression the two sides will strike an agreement, there has been less pressure on the Aussie dollar in recent weeks but the backdrop of such issues looks like it will continue to weigh on sentiment. Even if the US and China do pass a new deal, it is clear that global trade has changed forever under Trump, and the Aussie dollar as a currency so closely linked to global trade, will continue to be influenced by this news.

For me, May is more about the domestic issues facing Australia with low inflation prompting analysts to believe a cut is the way forward for the RBA. Whilst I am not overly confident the RBA will cut, I expect they will comment that they may well do in June, which I believe will weaken the Australian dollar.

The election on the 18th May is also a reason for concern in May, with the Labour party looking to perform well which could well have a negative outcome for the Australian dollar, since they have numerous plans to spend more. The election is likely to be a very topical even over the next 2 weeks and may well sway the Aussie dollar, increased volatility should be expected.

May looks set to be a very busy time for the Australian dollar so if you have any transactions that you are considering, please do not hesitate to contact me to discuss the latest news and forecasts, which will influence the value of your transfer. I work as a currency broker and can offer guidance as to some of the best strategies to consider when making an Australian dollar currency transfer.

Thank you for reading and please contact me directly to learn more on jmw@currencies.co.uk

Jonathan Watson

Australian Dollar weakens after RBA comments and how will the Irish backstop issue impact the Pound and the Australian Dollar

The Pound has been improving once again against the Australian Dollar and has moved by almost 4 cents during the course of this week.

The Australian Dollar weakened against the Pound after RBA Governor Philip Lowe’s comments that there was a chance that the Reserve Bank of Australia may be preparing for an interest rate cut later on during 2019.

Tomorrow morning the RBA will announce their latest Monetary Policy Statement, which will cover the issues and the reasons why the members voted as they did at the recent meeting.

The reason why this Statement could be key to the short term future of the GBPAUD exchange rate is because it will give us an insight as to what the appetite is of a future interest rate cut.

With the US Federal Reserve having increased interest rates by 9 times since the end of 2015 although they do not appear to be increasing interest rates at the same pace during this year, the risk for the Australian Dollar is that it does not offer the same yield of interest that is available in the impressive US economy at the moment.

If the RBA do decide to cut interest rates later this year then the likelihood is that this will cause the Australian Dollar to weaken in the future but there are many variable in between including the latest Brexit issues.

UK Prime Minister Theresa May is currently in discussions with European leaders to try and sort out the issue of the Irish backstop as the UK and the EU are currently at loggerheads as to how this scene will play out.

The Bank of England are also due to meet today to decide their latest monetary policy decision. Clearly at the moment there is little chance of any change to interest rates whilst we are just 7 weeks from when the UK is due to leave the European Union so it will be the accompanying press conference that will provide any clues as to what will happen to the Pound vs the Australian Dollar. Bank of England Governor has been rather cautious in his tone towards Brexit so any more of the same could see a small wobble for Sterling later on today.

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

Tom Holian teh@currencies.co.uk

 

Australian dollar at the mercy of global news!

The China – US Trade Wars have been a major factor driving the currency markets in the last 6-9 months, impacting the Australian dollar and the economy. Australian economic data has been mixed but with Chinese data reflecting a slowdown, particularly in Manufacturing, the Australian dollar has been softer.

Looking ahead there is lots of important news in the currency markets this week to move the Australian dollar, this includes information at home and abroad. Domestically we have the latest Australian CPI, Consumer Price Inflation, data to move the market. The Australian economy has been mixed and investors are still debating the prospect of interest rate hikes in the future.

Tomorrow is also important with the latest US Federal Reserve interest rate decision, which could be a market mover on the US dollar and thereby impact the Australian dollar. USDAUD is the most heavily traded pairing for the Aussie and any large movement on the USD can ‘weigh’ the Australian dollar down against other currencies.

Later this week we have the latest US-China trade war talks which could be a market mover in the future, clients with any AUD transfers should be keeping a very close eye on the latest news. The meeting this week might yield too much news since there is still a 1st March deadline for the talks to be finalised.

Finally, Friday is the latest US Non-Farm payroll data which might well trigger volatility on the Australian dollar, by altering global attitudes to risk and viewpoints on global trade. Clients looking to buy or sell the AUD should be very conscious of these developments which should see a very busy end to the week for the Australian dollar.

If you have a position buying or selling and wish to get a fresh update o the market and all the important issues driving your levels, please do get in touch to discuss the latest news with me Jonathan Watson.

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

Jonathan Watson

jmw@currencies.co.uk

Will next week’s vote on May’s Brexit deal cause movement for GBP/AUD?

The Pound has been trading within relatively thin volumes this week against most major currency pairs as the currency comes under pressure in the lead up to next week. On the 15th of this month, which is next Tuesday there will be a ‘meaningful vote’ on Prime Minister, Theresa May’s Brexit plan and much of the speculation this week revolves around that date.

The Australian Dollar, despite being the biggest loser in terms of currency throughout 2018 of the G10 countries, has actually been increasing in value over the past week as hopes of a agreement between the US and China over the trade war talks increase. There have been ongoing discussions recently between the two leading economies, and this is a positive for Australia as China is the country’s main trading partner.

So far this morning the Pound has got off to a poor start, as pressure builds in the lead up to next week’s vote, especially after the first planned vote was delayed as May was concerned of a major loss. The latest Brexit related update is that yesterday evening Parliament voted in a new amendment specifying that the government has 3-days to report back to the commons with its ‘plan B’ in the event that May loses next week.

Economic data is taking a back seat at the moment owing to the importance of UK politics at the moment, but it’s worth being aware that on Friday there will be UK GDP figures released at 9.30am with growth of 0.1% expected. I would expect to see a drop in the Pounds value if this figure disappointing especially if the figure shows a negative figure.

If you wish to be updated and to plan around what could be a busy week for the GBP/AUD pair, do feel free to register your interest with us.

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.

 

Will the Australian dollar weaken in 2019?

The Australian dollar is likely to weaken in 2019 as the concerns over Trade Wars intensify amongst investors. There is a growing concern that in the future the market will be more uncertain and the Australian dollar, as a commodity currency is likely to be weaker in the future. Clients with a position buying or selling the Australian currency should be strapping themselves in for a volatile period as the market tries to second guess what lies ahead.

In nearly every forecast for the year ahead I have read, the AUD is noted to come off worse from a worsening Trade Wars situation under Donald Trump, showing no signs of backing down and seeking to challenge China’s economic plans. Clients with a position buying or selling the Australian dollar will have a tough time in the future to try and second guess the market but as the Aussie dollar reflects global attitudes on trade, the likelihood is that the currency will weaken.

Clients who need to make an exchange should note not just the changing global attitudes on trade but also the negative political and economic effects at home in Australian too. Whilst the market had been pricing in for an interest rate hike in the future, some are now suggesting that the RBA, Reserve Bank of Australian will in fact be forced to look at an interest rate cut instead. This could send the AUD into a downward spiral as investors look for more comfortable and stable stores of value.

2019 is shaping up to be a more uncertain time on the currency markets as investors struggle to make sense of the changing global economy that lies ahead. Investors will struggle to find the Australian dollar an attractive currency to hold, particularly when the US dollar is now offering a higher return with a higher rates of interest on offer.

If you have a transfer to make and wish to consider the latest news and trends which will move the market, please do not hesitate to get in touch to discuss further.

Jonathan Watson

jmw@currencies.co.uk

What can we expect next for the Australian dollar?

The expectation is the for the Australian dollar to continue to face headwinds as the market tries to assess its attractiveness over the longer term. With Australia struggling whilst some other assets become more attractive, the pressure is on for the antipodean currency. Having lost value in recent weeks as market expectations deteriorate, what can we expect in the short term?

To answer some of the questions over the Australian dollar’s recent performance look no further than the United States. A key factor in this has been two fold from the US with raising interest rates and the Trade Wars both weighing on the performance of the Aussie dollar.

In raising interest rates to 2.25%, the US dollar is now a much more attractive currency to be holding from an investors point of view, versus the 1.5% on offer from Australia. With regard to the future prospects in this department, it appears likely that the US will be continuing to raise interest rates. This will only increase the trend we have seen of late and continue the pressure on the Australian currency.

On the subject of Trade Wars, these do not appear to be diminishing and therefore the Australian dollar should remain under pressure as these potentially intensify or remain in place. Expectations for the Australian dollar will continue to focus on its attractiveness to hold but with these issues continuing and wider concerns in the global economy about just what lies ahead, the Aussie might find more troubled waters ahead.

Next week is Unemployment data which will be a big driver on the exchange rate and could see a shift. There is a focus on Australian interest rates too and we could easily see this data impacting future decisions. Whilst no hikes are likely down under anytime soon, this is a more short term factor to move rates.

Thank you for reading this post and I would be delighted to speak to you if you have a currency transaction to make in the coming weeks. Please contact me Jonathan Watson on jmw@currencies.co.uk to learn more.

Price changes for GBP/AUD likely to be driven by the Pound over the next 24-hours

Those of our clients and regular readers following the Pound to Australian Dollar exchange rate should pay close attention to UK politics today, as I believe the next spike in the GBP/AUD’s value is likely to be driven by UK politics.

Yesterday all eyes were on Boris Johnson’s speech at the Conservative Party Conference, and he didn’t disappoint as he gave another harsh critique of the ‘Chequers plan’ devised by the current UK Prime Minister, Theresa May. Today there could be movement for Sterling exchange rates against all major currency pairs as it’s the final day of the Conservative Party Conference, and Theresa May is scheduled to speak with Brexit being the main focus.

Yesterday Boris Johnson was supportive of May’s leadership but he once again urged her to move away from the Chequers plan she has devised and suggested that she focuses more on a Canadian style deal. I expect her to be questioned on his comments and the markets to follow her responses closely. With Brexit now just around the corner and expectations of a deal being in place by November, I expect to see Brexit headlines dominate financial media and for it to be the main driver of the Pound to Aussie Dollar exchange rate.

On the Australian side we’ve seen the currency soften over the past year, mostly owing to Aussie Dollar weakness. The greater the gap between US and Australian exchange rates the more likely this trend will continue, so those following the strength of the Aussie Dollar should also pay attention to US monetary policy and this is something we can help our readers with should they wish.

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 turmoil drives the Aussie!

The Australian dollar has really weakened this week as investors struggle to make sense of the uncertainty present in their current political situation. The current Prime Minister is now Scott Morrison, after the ousting of Malcolm Turnbull. Interestingly, the Australian has risen today as the news has settled the immediate uncertainty of a leadership contest.

The Australian dollar had been rising on the improved economic outlook for Australia, investors were backing the RBA, Reserve Bank of Australia to raise interest rates in the future but it really is likely to be longer term. In particular this uncertainty over the economic outlook could prove very damaging for interest rates as investors shy away from making any key decisions with the uncertainty present.

The big question now is whether Mr Morrison can hang on to the position or will he have to call an election to justify his position? Any signs of an election or the actual announcement of an election down under would see the Australian dollar much weaker, clients looking to buy or sell Australian dollars could find themselves in a volatile market if this happens.

The Australian dollar has also risen today on the expectations that there has been progress with Chinese trade talks which might have previously seen the Australian dollar weaker. Whilst the trade wars are bad news, the expectation that they will not massively deteriorate and see huge damage to the Australian economy might help the Australian dollar.

Finally, events concerning Donald Trump should also be a market mover on the Australian dollar, you never quite know what Donald Trump will do or say which can move rates! Lately, the weaker US dollar we have seen has helped the Australian dollar to rise. Further woes and concerns surrounding Donald Trump and his government could lead to a stronger Australian dollar.

For more information on the best rates and strategy to move money internationally at the best prices, please speak to me Jonathan Watson by emailing jmw@currencies.co.uk

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.